08 Title: Money Not: Empathy and the Magic Wrapping Paper at the Base Information Level
Introduction
In the evolution of human trade, barter systems were the foundation of economic exchange long before the invention of money. Barter was not simply an exchange of goods or services; it was a complex system underpinned by empathy and mutual understanding, elements that have been largely stripped away by the introduction of money.
While money served to simplify trade by providing a universal measure of value, it could never fully capture the pure information exchanged between individuals in a barter system information rooted in human emotion, fairness, trust, and social responsibility.
In this note, I will investigate the role of pure information in barter, exploring how it connects to the analogy of a magic wrapping paper, a metaphor for how empathy wraps around and protects the integrity of each exchange. This analogy highlights how money, despite its efficiency, cannot capture the base information level of empathy, leaving modern monetary systems inherently incomplete.
The Concept of Pure Information in Barter
In a barter system, pure information refers to the full set of data, emotions, and relationships that underpin each transaction. This information is not limited to the material value of the items being traded but includes the emotional, social, and ethical contexts in which the exchange occurs.
When two individuals engage in a barter exchange, they are not only trading goods they are also exchanging information about their needs, intentions, and mutual obligations.
For example, when a farmer trades grain with a blacksmith for tools, the trade is not merely a simple transaction of goods. It involves an implicit understanding of each other’s circumstances: the farmer’s need for tools to produce more crops and the blacksmith’s need for food to feed their family.
The pure information exchanged includes the trust that both parties will honour the agreement, the social expectation that they will continue to support each other in future exchanges, and the cultural norms that govern fairness and reciprocity within the community.
Empathy as Pure Information in Barter
Empathy plays a central role in the exchange of pure information. Unlike monetary transactions, which are often impersonal and disconnected from the individuals involved, barter transactions are deeply relational.
Each party must take into account the emotional and social needs of the other, ensuring that the exchange is fair and mutually beneficial. This empathy creates a foundation of trust and understanding that cannot be reduced to material value alone.
Empathy in barter ensures that the trade is not purely transactional. It involves recognising the human connection between the participants, acknowledging their individual circumstances and ensuring that the exchange benefits both parties in a way that money cannot replicate. This is what we refer to as pure information at the base level the full emotional, social, and ethical context that surrounds each trade.
The Magic Wrapping Paper Analogy: Layers of Empathy
To illustrate the role of empathy as pure information in barter, I introduce the analogy of magic wrapping paper. In this metaphor, the physical goods being exchanged are like a present and the empathy that surrounds the exchange is this Magic Wrapping Paper. Each layer of wrapping paper represents a different element of empathy trust, fairness, social responsibility, and mutual understanding.
The magic of the wrapping paper lies in its ability to preserve and protect the pure information within the exchange, ensuring that the human aspects of the trade remain intact.
Multiple layers of the Magic Wrapping Paper reflect the complexity of empathy in each exchange. The first layer might represent trust the belief that both parties will uphold their side of the agreement. Another layer represents fairness, ensuring that both parties feel the exchange is equitable.
Further layers represent social responsibility and the long-term relationship between the parties, reinforcing the idea that barter is not just about goods but about maintaining community bonds.
A Table of Empathy Exchanged in Transactions
Flexibility:
This wrapping paper is magical because it can be broken down and shared. If the exchange is unbalanced in terms of material value, the empathy layers ensure that the relationship remains intact.
The Magic Wrapping Paper ensures that both parties feel valued and respected, even if the material exchange is imperfect. The ability to reuse and share this empathy makes barter far more resilient and adaptable than money.
Money and the Loss of Pure Information
When money was introduced as a medium of exchange, it aimed to simplify transactions by providing a universal measure of value. While money succeeded in making trade more efficient, it failed to capture the pure information that was integral to barter.
Money reduces all transactions to numerical values, stripping away the layers of empathy that made barter such an effective and relational system.
In a monetary system, trust and fairness are no longer based on personal relationships but are instead dictated by the market. The emotional and social context of the trade is lost, as money becomes the sole measure of value.
In contrast to the magic wrapping paper of empathy that surrounds each barter exchange, money is a cold, impersonal medium that fails to capture the human connection behind the trade.
This is particularly evident in modern monetary systems, where fiat currency money not backed by any physical commodity can be manipulated by governments and financial institutions.
The introduction of interest rates and debt based systems has further eroded the role of empathy in economic exchange, allowing individuals and corporations to extract value from others without consideration for their social and emotional well-being.
Why Money Cannot Capture the Magic Wrapping Paper of Empathy
There are several reasons why money can never fully capture the pure information encapsulated by the Magic Wrapping Paper of empathy in barter:
Impersonal Transactions:
Money allows for anonymous exchanges, where the parties involved have no emotional connection. In a barter system, each exchange is personal and relational, with empathy acting as the glue that holds the transaction together. Money, by contrast, reduces the exchange to a material value, ignoring the human element.
Fixed Value:
Money assigns a fixed numerical value to goods and services, stripping away the flexibility inherent in barter. In a barter system, the value of goods is determined by mutual understanding and negotiation, taking into account the specific needs and circumstances of the parties involved. Money cannot accommodate this level of flexibility or nuance.
Loss of Trust and Reciprocity:
In barter, trust is built over time through ongoing relationships and the expectation of reciprocity. Money, however, removes the need for trust, allowing individuals to engage in one-off, impersonal transactions. This erodes the social bonds that were once maintained through empathetic exchanges in barter.
Dehumanisation of Exchange:
Barter is inherently human it requires participants to engage with one another on a personal level, taking into account their emotional and social needs. Money, on the other hand, dehumanises exchange by reducing it to a mere transaction of value. The magic wrapping paper, which protected the empathy in barter, is torn away, leaving only the bare material exchange.
Conclusion: The Magic Wrapping Paper at the Base Information Level
The analogy of Magic Wrapping Paper beautifully captures the role of pure information in barter information that is layered with empathy, trust, fairness, and social responsibility. These layers ensured that barter exchanges were not just about goods but about maintaining relationships and strengthening communities.
Money, while partly efficient, can never replicate the human connection that was integral to barter. It strips away the Magic Wrapping Paper, reducing exchanges to mere transactions of value and ignoring the emotional and social contexts that once made trade such a powerful tool for building trust and empathy.
Ultimately, money fails to capture the base information level of human empathy, leaving modern monetary systems inherently flawed.
As we move further into a world dominated by impersonal financial transactions, it is worth reflecting on the richness of empathy that was once embedded in every trade, wrapped in layers of Magic that money could never buy a copy of.
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Ferguson, Niall. The Ascent of Money: A Financial History of the World. Penguin Press, 2008.
Polanyi, Karl. The Great Transformation: The Political and Economic Origins of Our Time. Beacon Press, 1944.
Stein, Edith. On the Problem of Empathy. ICS Publications, 1989.