1,2,3, go!

Don't rush me!

Philip, I promise I'll catch you.

I know, but how do I know?

I'm your wife.

Don't you trust me?

Of course!

Then go for it!

Okay, okay!

Here we go…

Ah, I can't!

Oh, forget it.

No, no. I can do this.

1...2...3…

Aaaah!

Trust is hard.

Counting on something you can't see or touch to be there for you when you need it can be

scary.

But whether we like it or not, you and everyone you know plays a global game of trust every

day.

It's called MONEY.

Money is imaginary.

This bill can't be used as food or clothing or shelter.

And yet it has value because we've all agreed to pretend that it does.

The employee who accepts a paycheck for their hours of work, the shopper who puts a new

pair of shoes on their credit card--even the bankrobber risking his life for a bagful of

benjamins--they're all putting their faith in a collective fantasy that only works because

everyone else believes in it too.

The earliest types of currency were things that had practical value, like food or livestock

or furs.

These commodity monies didn't require much trust.

A toolmaker is willing to accept a bag of barley as payment, because even if he has

more than he needs, he can be pretty sure that someone else will want it.

Because, you know, you can eat it!

But commodity money isn't very convenient.

Try schlepping forty bags of barley across town just to pay your rent.

And if your landlord doesn't spend it right away, it could mold or get eaten by rats.

And if he wants to buy a tool from you, he has to carry the sacks all the way back to

your house.

At some point, someone realized that life would be so much easier if instead of actually

carrying sacks of barley back and forth, we could just agree to pretend to carry sacks

of barley back and forth.

We'd just need some way to keep track of it all.

This 5,000 year old Sumerian clay tablet is one of the oldest examples of writing ever

found.

It says: “29,086 measures of barley, 37 months.”

Writing wasn't invented for royal decrees or epic poems... it was invented to keep track

of imaginary sacks of barley--in other words, credits and debits.

So when St. Paul wrote that “love of money is the root of all evil,” he may have had

a point, but he couldn't have written it down it if it weren't for money.

Once humans were willing to think about value symbolically, it wasn't long before we started

using other materials as currency.

But of all the elements on the periodic scale, which one should we use?

Well, first, it should be a solid.

And it can't be toxic, obviously.

It can't be reactive.

Or radioactive.

It should be easy to extract and smelt.

Rare enough to be valuable, but common enough to be practical.

It shouldn't corrode, rust or degrade.

But it should be soft enough to cut and shape.

And… it should be pretty.

That really only leaves a few good options, and the best fit is GOLD.

We're used to thinking of gold as inherently precious, but the main reason we use it as

a currency is… because it's great at being a currency.

Physically, it's not much more useful than a paper bill.

Maybe less.

At least you can burn paper for warmth.

So that paranoid survivalist burying bullion in his backyard is still playing the trust

game.

He's trusting that even after the apocalypse, everyone will agree to pretend that his gold

is valuable.

The next big financial innovation came around 640 BCE in what is now Turkey, when someone

had the bright idea to pre-weigh lumps of gold and stamp them with the royal seal, and

KA-CHING! the first coins were born.

That stamp is the king's personal guarantee of the coin's worth.

No need to weigh it or test its purity--if you trust the king, you can trust this coin.

Counterfeiting is essentially royal impersonation--a serious offense--and still known today as

a lese-majeste crime.

Hm.

Maybe that's why the organization that investigates counterfeiting in America is the same one

that protects the president from attacks: the Secret Service.

Coins were so convenient that they quickly spread all over the world, and almost every

incarnation had some sort of symbol of trusted authority on it.

If you were lucky enough to have a lot of these coins, you'd

need somewhere safe to store them, so BANKS were founded where you could exchange your

gold coins for a slip of paper called a “promissory note”: a “promise” that the bearer could

come back for their coins whenever they wanted.

But a funny thing happened: these notes were so light and convenient that people actually

preferred them as currency, and VOILA: Paper money.

Governments eventually took over the role of printing banknotes, and covered them with

all types of assurances that this is more than just a flat rectangle of cotton and linen.

We especially love to put images of famous people on our bills--not just to honor the

people, but to use their stature and respect to reinforce trust in the currency.

I mean, look at ol' George there.

Doesn't he seem so TRUSTWORTHY?

“This money is REAL.

I cannot tell a lie.”

So when you deposit your paycheck in the bank, you're taking it on faith that you'll

be able to withdraw it later as cash, which is a promise that can be redeemed for gold,

which you're hoping other people will exchange for food and shelter and all the other stuff

we need to live.

Wow, that's some Inception levels of trust going on there.

Kinda scary when you think about it.

Sure, but the fact that money is imaginary does give you a lot more power in your relationship

with it.

How you think about money affects its very nature.

In a future episode, we'll look at how this global trust experiment has moved beyond the

physical realm into the invisible world of cyberspace.

How can trust possibly survive when the majority of the world's wealth exists only in the

minds of computers?

We trust you'll keep watching.

Thank you to Curiosity Stream for supporting PBS Digital Studios.

Curiosity Stream is a subscription streaming service that offers documentaries

and non-fiction title from a variety of film-makers. Including Curiosity Stream Originals!

For example, you can watch "The Ascent of Money" to learn more about the history of finance.

You can learn more at curiositystream.com/twocents