ABSTRACT
Hume describes money as one of the three spontaneous institutions of social organization; the others are language and law. Money facilitates the division of labour and specialization, preconditions for the productivity that underpins complex institutions of government, and scientific and technological progress. The chapter argues that interdependence may be the most important property of money, but also that it is ambiguous in its consequences. Money is a social contract: it depends on recognition by others – or it is worthless. The other side of interdependence is instability and, in the extreme, destructive panic. Finance and money involve an exchange between now and the future. The people struggle to make sense of inter-temporal exchange, and the people often deny or are confused by uncertainty. The final property of money – its allure – is equally revealing of human frailty.
