Yuri Tarnopolsky
7. On the Smell of Money
 money. ATP.  evolution. Gibbs free energy.

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Essay 7. On the Smell of Money

Most certainly there is no life on Mars. What about life in the universe?
If this is a legitimate question, then here is another one:  Most certainly there is no money on Mars. What about money in the universe?

We are not aware of any intelligent beings in the universe except ourselves. We know, however, until proven otherwise, that the laws of nature are the same whether on Earth or on Mars. The concepts of time, space, matter, energy, temperature, and entropy are equally applicable at least at any point of the near universe our space probes can reach. We have good reasons to believe that life exists somewhere on other planets and it may look different from our own.

On our own planet we are not so much concerned about entropy and even energy as about money. Many can buy energy and matter, maintain comfortable temperature, save time, bring in order what has fallen into disarray, and prolong life. Our literature pays as much attention to money as to love, sex, and power. It seems to be the true focal point of our part of the universe populated by humans.

Money is the simplest thing: it is just a number. It is a very simple number: an integer. We can safely round the useless pennies. Money is the easiest human goal to imagine and to check if it has been achieved: it is just a number. This is why money is so old: it is easy to count it.

We could expect some plain cold simplicity from a number. Not so with money.

What else, what issue, what thing can be more burning, restless like a young dog, tugging the hem of your dress, asking for attention, omnipresent, noisy, playful, deceitful, waking you up in the middle of the night, prone to illness, gratifying, magnetic, mysterious, rewarding, evasive, mercurial, treacherous, dependent, and exhausting?  There is one: sex,  but money is eternal, universal, and everlasting. Money is a second sex, a reproductive device that not only multiplies itself  but rewards you with a whole assortment of heavenly phases of investment, possession, spending, and withdrawal.

Money's  childhood and adolescence bring worries typical for these stages, money go astray and end up badly, but what can be compared with the sweet peaceful joy of the proven, muscular, mature money with a host of fresh rosy-cheeked monetary grandchildren on its patriarchal lap?

I read somewhere that in Ancient Babylon money was regarded a form of life growing on its own, but I cannot find the reference. The Babylonians had banks where they accepted grain and cattle, the multiplying forms of property, and this is, probably, where the idea came from.

A quiet clean bank lobby is a good place to whisper financial confessions to a clerk, but some of us visit such places less and less often in person, as we might shun a temple, and we touch the greenish paper less and less, delegating the talk, touch, and ink to the electrons.

Money is getting more and more spiritual, literally. Or, at least, less material. Money has become a truly ecumenical religion: people with either money or want of it find each other and talk same language. They can talk for hours. One dollar is a line and a hundred is a verse of some sacred book.  The temples and shrines are the same everywhere. In its American pantheon-pandemonium, the IRS is the hell, the CPI is its Virgil, FED is Zeus, and Nasdaq tells you what prayer to say tonight. But make no mistake: despite its pagan looks, it is a monotheism. It is the substance of civilization, its blood and breath. It is a form of life. It is life.

Money is not just an object of worship, which it has always been. The old money divided people and made them fight each other. The modern money is a new universal  faith carrying the hard to believe promise of uniting the world forever and bringing everlasting peace and true brotherhood.

What money is not is DNA. It carries no information and no hint of what can materialize out of it. It is not a force, either: it meets no resistance. There is no anti-money and no counter-money. It is not matter: the laws of conservation used to apply to it when it was in the form of golden coins, but not anymore.

Money has no shape, no order, no individuality, and, as the cynics say, no smell. In its transformations it passes through a multitude of forms, like energy, but we get the same energy whether we burn a dollar or a hundred dollar bill.

Karl Marx was right when he saw money as an embodiment of work: money is work because work is energy. Nothing can be created without energy. But today the cycle of causality seems closed: not only money is  produced by human work,  but work itself is produced by money, its power, and lure. Apparently, only because the governments and individuals have money in very much different quantities, other people can make them, too.

What a strange thing: a cocktail of energy, religion, chaos, and work. Money has generated two fundamentally opposite ideas: “inequality of wealth is sacred” and “inequality of wealth is a curse.”  The fact is that  money, like mercury,  tends to fuse into large globules and absorb the small ones. This has been known since Biblical times.

Why not to divide all the money equally?  Because the effect of money is not additive. Million dollars divided among million men cannot produce the same effect as million dollars owned by one person: it is the concentration of money and the inequality of its distribution that  brings the social wheel into motion. Money is like the Niagara river contained by narrow banks and split into two levels by the waterfall. It produces energy, apparently, out of nothing, but, in fact, out of inequality. One cannot make energy from the greatest of the Great Lakes alone. Energy can be produced from the ocean because of the difference between the low and the high tide.

Everything has its price. The price tags on love, loyalty, betrayal, and life are not always publicly displayed. Human life has its own price tag. The cost of birth, food, clothing, education, transportation, court litigation for damages, and burial are all calculated. To buy and sell human beings is illegal, but to buy eggs and pay fee for adoption and reproductive function is not.

The object that comes to mind first in connection with price is product for sale, merchandise, a Thing.  The Thing is not money: it creates money when it falls (or climbs) from the state of made to the state of sold, although not a slightest change can be noticed in it during this short process. Only after the first night of possession, the look of the bought Thing changes.

Money creates not only goods for human needs, so that humans could exist, interact,  and procreate. Money creates Things for their own sake, as well as Things satisfying the needs of Things, Things to protect, manage, and move other Things, Things to make more Things, and Things to ensure interaction and communication between Things and humans.

We can talk about money ad infinitum and even get emotional.

Even the professionals talk about money so much and give so many definitions, properties, and functions of money that each statement looks suspiciously shallow. There must be some simple idea behind money, as it is behind any fundamental concept. I am tempted to try to look at money from a big distance and from the outside of economics.

Money as tool of exchanging goods and services appeared millennia ago. To hunt and to grow food is a tedious and insecure business; to buy is a fast alternative, the first form of immediate gratification after sex.

If humans biologically are as old as their tools, human society is as old as its money. Any evolution starts from a point and then branches out into a tree.

Looking for the genesis of money, I would assume that the first money could be the tools and hand-made objects themselves: they were their own money.  We have an oblique confirmation that money could have actually diverged from tools.  The ancient Chinese used bronze tool money in the form of little spades and knives around 300 B.C.  Some historians of money regard cattle as its oldest form.

Since I am not a specialist in money, whatever I write is just fantasies. We find a cluster of fascinating Web sites about money with the real stuff, including its early history.

 The exchange of  good and services played a role similar to sexual reproduction involving the exchange of genetic materials. The exchange presumes a physical contact. Various things created at different places could evolve, improve, and combine much faster when put side by side and compared. The coins could be carried to the marketplace much faster and easier than cattle.

Humans of all kinds make a single species because they could mate and trade with each other. They could do both even without common language. There is an animal simplicity in trade.

If the material Things were the proteins of civilization, money played the role of the carrier of genetic information. The carrier, for example, radio signal, is not information. It is never written on amino acids and nucleotides what can be built from them, the fly or the elephant. It is never written on coins and bills what can be bought for them.  For that matter, it is not written on a kilowatt of electricity whether you can use it for cooking or for cooling.

Wherever there is life, at least on Earth, there are amino acids and nucleic acids. Wherever there are conductors crossing a magnetic field, there is electricity. Wherever there is—what?—in the universe, there is money. The “what” seems to be society. The question is what all three have in common. What are the cosmic analogies of money? Is it energy? temperature? entropy? mass?  What is society from the point of view of physics?  I am on the hunt for metaphors and parallels. I cannot buy them.

In biology, most biochemical functions are performed by enzymes, usually pretty similar for different species. To reproduce, the cell needs energy, matter, and code. The forth component is the enzymes that the cell carries over for the start and then synthesizes on the spot.

The Thing needs same four components to reproduce. Money can buy all that: physical energy of food and electricity,  brick and mortar, blueprint, and skilled labor. And—sorry for being cynical—even the mate.

If money can do all that, then we come to the most universal function of money: reproduction. Money takes part in the replication of the social organism. Of course, not as a code, but as some other component.

Humans mate and so procreate biologically. Humans trade and invest and so reproduce what remains in the civilization if we subtract the humans.  If all humans in an instant go to heaven, what remains is Things, the material civilization.  All the books would turn into useless Things because knowledge is dead without humans. If there are intelligent and autonomous Things, they would still rely on their codes and files. Would they need money?

This imaginary situation is a good opportunity to explore the extra-human function of money.

We know what humans are. What is a machine? From what mental distance the difference between both is blurred?

The meaning of the term machine has evolved like the machines themselves.

The oldest view of the machine is mechanical. It is a combination or one of the following simple machines: the lever, the pulley, the inclined plane, and the wheel and axle. Of course, we cannot expect from it either a brain scan or solving differential equations.

Machine is defined in Webster II as “a system, usually, of rigid bodies, constructed and connected to change, transmit, and direct applied forces in a predetermined way to accomplish a particular objective, as performance of useful work. “

This definition formally fits even the computer, although neither the input forces nor the output work are essential for its objective. It also fits an enslaved human being used by another human being, although it is not constructed by any other human being.

I believe that there is an aspect of machine performance, omitted in the definition, that is essential for a much larger class of objects: the machine is capable of repeating its functions several times. In other words, the machine replicates performance in time, not in space. This is what is expected from CAT scanner, computer, telescope, airplane, and what not.

There are disposable one-time machines, but only as an exception or when disposability is an objective, for example, the detonator for an explosive or a rocket booster. The space shuttle is a typical machine.

I would define a very abstract machine as a system that repeatedly goes through a similar sequence of states. Even the solar system fits this definition and, who knows, maybe even the universe. The machine does not need to be of any particular material or physical nature.

The very abstract machine is a class of abstract machines that can be controlled: mostly started and stopped, but possibly also accelerated, slowed down, and switched to a different function.

Considering the oldest man-made machines, a pot, a knife, an ax, a needle are not machines because they do not change. They are attended by humans, the typical machines. The first machine that I can think of is the wheel. It repeatedly goes through a cycle of states and it can be started and stopped. Some ancient machines for taking water from the stream, like the Egyptian shadoof, used the principle of lever and did not have a wheel. In my youth I saw such devices called cranes in the Ukrainian countryside.

Computer is definitely a machine because it can be used repeatedly and for a wide range of purposes. It is a very sophisticated machine, like humans, because, while the wheel can only roll, the result of  the computer's activity is not predetermined. The particular inputs and outputs could be one-time, like a birthday greeting to a friend, but the cycles of performance are similar. The states of the system do not need to be repeated in the exact sequence. The mathematical phenomenon of strange attractor illustrates a mathematical machine that is not material at all.

There are also complicated molecular machines called biochemical cycles. They do not have any rigid bodies. The Krebs cycle, for example, repeatedly spins through a circular sequence of chemical states and provides living cells with energy through aerobic respiration or breathing, to put it simply. If you step far back from the diagram, all you see is a wheel.

In fact, the Krebs cycle is more like a circular assembly line supplied with parts at every station and with ready product coming off at one of them, something like the baggage conveyer belt at the airports. The difference is that the Krebs cycle is, actually, a disassembly line: it takes a molecule of already partially disassembled glucose coming from food and at every stage takes a piece of it and processes. The output is energy packed in a form of tiny molecular batteries called NADH  and FADH2. The batteries are transported  to a place where they are discharged  in the presence of oxygen and the energy is repackaged into ATP , another form of molecular battery, the universal currency of energy accepted everywhere in the body from brain to muscles to kidneys. The discharged batteries of all kinds (NADH, FADN2, and ATP) go back to their charging stations.

The discharged ATP is called ADP. A single molecule of glucose is capable of charging 36 ADP batteries while it quietly burns to carbon dioxide and water

A parallel with battery on the Web sounds like the poetry of Lucretius:

    How does it work, this marvelous battery
    to which we owe our lives?
    The battery is a molecule -
    a molecule called adenosine triphosphate -
    abbreviated as ATP.  

The wonderful molecular machine, of which the Krebs cycle is only a part, can be compared also with a watermill producing work from the energy of the falling water. In the absence of water, alias, food, the machine stops. In the organism, the machine cannot be stopped or started from the inside, but it can be regulated.

The glucose that we need to keep the body and mind going comes from edible plants. The plants have their own assembly line that really, literally, visibly assembles. The molecule of glucose is gradually built using carbon dioxide, water, and the energy of light.  The plants “exhale” the oxygen that we, the animals, breathe.

The idea of environmentalism, in short, is that all life on Earth is a single system. In a sense, it is a single organism that those of us who are humans, conspired with Things, are starting to wreck.

I cannot find any flaw in this idea, but it implies that this single organism has no competition, no spare copy, but whatever can happen to it is perfectly natural and neither good nor bad. If we are so dumb, the hell with us, and let other forms of life push us out. The function of any organism is to adapt, and life will adapt to anything. As an organ of the organism, we might adapt, too, although, to put it politely, in an evolved form, like the remnants of our former tail in our spine.

 But back to our beloved money.

 It seems that the evolutionary roots of money could be found deep in the very basement of  life. ATP is the money of animal organisms. It has to be paid  for running a treadmill, solving a mathematical problem, watching TV (it requires energy, too), building up the skeleton, healing a wound, digesting food (here is a form of investment!), and removing the refuse from the organism.

 Moreover, ATP provides energy for the light emitting by the firefly and electricity generated by electric fish. The parallel between ATP and money seems complete. It buys everything, but all ATP bills are alike.

All this is possible because of the wide array of abstract machines and the availability of energy to bring them into action. It is the repeatable function that is essential for an abstract machine, and the cycle is only one form of it. There are non-cyclical biochemical pathways, too.

At a higher level, we are, probably (but, hopefully, not exclusively)  machines for spreading our genes, or "gene survival machines." This idea belongs to Richard Dawkins, who believes that our body is a disposable, throw-away machine to preserve and pass our genes.

We are born, eat, grow, study, eat, work, mature, eat, work, seek a mate, eat, work, procreate, eat, work, suffer, and die. It looks like we are disposable machines as individuals, but on a shorter time scale we are capable of the greatest quantity and variety of repeatable actions any machine can do, and no wonder we get finally worn out. For that matter, no molecular, biological, mechanical machine, or even computer are any better.  We can boast a great longevity in the animal world. Anyway, the social machine that reproduces the species still works fine. But due to some basic laws of nature, no machine is forever, all of them are disposable in the long run.

If money is energy, what kind of energy is that? This question can be answered simply: free energy. To explain what free energy is would take a separate essay: the concepts of heat, work, free energy, entropy, and temperature are the primary and elementary building blocks of our understanding of everything in the world. As all really fundamental blocks, they cannot be explained by reduction to simpler blocks. The best way to understanding is to play with them, like a child learning about the world through vision, hearing, touch, and Lego.

The term free energy is misleading in our times of the free gift madness. It is not the free of charge energy. There are a lot of sites on the Web about "free" energy from natural sources, like wind, ocean currents, etc., but they are not of immediate interest for us. What I have in mind is the so called Gibbs free energy, one of the basic concepts of thermodynamics. If somebody wants to learn more about it, search "free energy" + thermodynamics.

In short, “free energy,” or Gibbs free energy, is the part of total energy that brings order into chaos by performing work. It is called free because it is not tied to heat. It is really like free money that could be used for purchase. Heat, on the contrary, is chaos and it turns everything into chaos. Hot money can be compared with an account with irregular deposits and unpredictable bills. You never know whether your check will bounce. If this comparison appeals more, it is the stolen money and you, nervously looking for a police car coming to your driveway.

Free energy is like an account of completely disposable money, in the best case filled up with the salary from a life tenure job. This is something that is never guaranteed to any particular species, all the more, individual.

Since order and chaos are concepts applicable to all systems, social, mental, animate, and inanimate, thermodynamics is in a way related to anything in the world and not just to physical systems.

The symbol of free energy is G, to honor the genius of Josiah Willard Gibbs whom chemists, mathematicians, and physicists recognize as one of their kin.
From the point of view of thermodynamics, "free" energy is the newest snake oil. The Hoover Dam cost $165 million (about $2 billion in the 2000 dollars, remarkably low today, especially as compared with the over the $10 billion Boston Big Dig), and it produces "free" energy.  Nevertheless, this overlapping of financial and scientific terminology around energy is meaningful: if money smells, it is the smell of energy. If energy smells, it is the smell of money.

Our civilization works like an imperfect and capricious clockwork made of billions of parts. Nevertheless, the absolute majority of us get up in the morning and go to work, although we can easily imagine millions of other alternatives: sleeping until noon and go fishing after that. Somehow, this is possible only during a small part of the year. The energy of fuel, wind, and water goes to keep this system in order, and no wonder the gigantic construct sways and trembles in the torrent of energy that keeps it standing in a precarious steady state, like the Great Pyramid of Khufu set on its apex.

Similarly, if our body and mind work with an acceptable accuracy, it is because our cells and organs are supplied with freshly charged ATP batteries. Stop the supply, and in 45 days or much earlier you are dead. Without water it would take about five days because the batteries are transported by water, the main component of our body.

Money, therefore (it is not the logical therefore), is the ATP of social organism, it is the free energy equivalent of making a Thing for sale, never accurate, but socially acceptable.

Gibbs' free energy is a tricky thing, however.  Its ability to perform work and tame chaos depends on the temperature of the system. The higher the temperature, the more free energy is needed to do the same job. This is why inflation jumps in times of turmoil. This is why Alan Greenspan throws a bucket of cold water at an overheated economy. But temperature is a separate subject.

My point is that the modern and, especially, future function of money is to represent the free energy necessary to maintain a species of a dynamic competitive system. It can be a cell, an individual, a custom, an idea, a Thing, a species, or a genus of any of the above.

I see money in the process of evolution from its primary form of ATP. Only economists and historians who find this idea appealing (it might have been already expressed; it is hard to be original on the Web) could, theoretically, restore all the intermediate steps from the beginning to the current electronic form. I have to stop here and leave the logical gap to possible enthusiasts.

The new direction of econophysics, ridiculed by most classical economists, tries to bridge money with both physics and biology. I have some uncommon reservations about computer models, and, probably, talk about them elsewhere. Anyway,  the thermodynamic connotations of money are widely accepted. "In human society money serves to measure and mediate local markets for decreasing entropy, whether it measures the refinement of an ounce of gold, the energy available in a ton of coal,  the price of a share in a multinational organization, or the value of information accumulated in a book." (George B. Dyson, Darwin Among the Machines, Addison-Wesley Publishing Company, 1997: Reding, MA, Menlo Parc, CA, etc., p. 170; there is much more about money and information).  Nebulous and wonderful! But I cannot offer anything more coherent except a note. Two states of a system can have the same entropy and energy. Nevertheless, to transform the system from one state to another might require free energy because the intermediate state has a higher energy than the initial and the final one. Example: you are moving to a new house on the same street just couple blocks up. You have to do quite a work or pay for it.

The coherence, like moving, should be left to professionals.

What is easier for me is to fantasize about the future of money. I see it based on the energy standard because I believe that the energy crisis is highly probable. Gold was popular as money because one could not grow gold in the garden. Paper money is in use because to make a perfect counterfeit money is more difficult than to strike a gold mine. Electronic money is in use because it is still difficult to crack the passwords (but, I suppose, less difficult than to make a perfect hundred dollar bill). When energy is scarce and everything depends on it, it becomes the currency. To make free energy is more difficult than to grow money in the garden: it is impossible.

We can look at the future coins even today. Just go to the battery stand in a pharmacy. You can see there the bills of various denomination, like B, AA, AAA, etc., as well as small, flat and round coins, pretty much like the coins in your pockets, that can make your watch running for a year or two. With coins like that, one can buy his or her hearing for a month and others can even buy a stretch of life by feeding the coins into their heart pacers.

I suspect, however, that it is impossible to fully understand the nature of the evolution of money if we do not take to account a particular aspect of evolution (see Essay 6).

The energy of food and the fluidity of water are necessary for the survival of all life forms. But what is life? The notion of life has been expanding since the times of Aristotle. Biological life is only one category of the formerly exclusive club of life.

Does anybody really think that $10,000 watch is necessary for human survival? Of course, not. A $5 watch would do. The $9,995 difference goes to the survival machine of the watch.

Biologists see evolution limited to life forms. Sociologists see it as evolution of social forms. The historians of technology (technobiologists?) would see it as evolution of the Things, and the historians of culture look at the evolution of ideas and art. In fact, the substrate of evolution, at least today, comprises all of the above. Anything that lives and evolves, however, can exist only on the constant supply of G, Gibbs' free energy. The larger life, meta-life, includes the forest, the whale, the human, the watch, the car, the city, the government, and the Internet.

From the evolutionary point of view, the really free free energy comes from the amazing very abstract machine of the solar system that, working as a flywheel, supplies light, changes the tide, the seasons, raises the wind and drives the currents. That machine, full of energy and complexity, once gave birth to life. Its own evolution is the subject for astrophysicists. The enthusiasts of free energy are, therefore, right. The problem is that the utilization of the free free energy is not free.

This essay is not about dollars, however, it is about their smell.

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