Facebook launchesLibra's underlying 

logic: the moral origin of money and 

its future

Wall Street Club2019-07-02

Facebook推出Libra的底层逻辑：货币的道德起源及其未来

华尔街俱乐部    2019-07-02

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Well-knowneconomist and senior professor of Fudan University, Professor Wesson once saida memorable word: "In the currency field, I feel that all economicknowledge is shaking."

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Money isconsidered to be one of the greatest inventions of mankind, but its nature andoperational laws are quite complex and mysterious, and this mystery continuesto deepen with the advancement of technology.

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On June 18th, thedigital stability coin Libra (Libra) test network led by global socialnetworking giant Facebook was launched on GitHub and released a white paper.Facebook has as many as 2.7 billion users, not to mention the fact that it hasalso joined 26 major companies such as VISA, PayPal, Booking and Ebay. Thisexcites people who are optimistic about blockchain and encrypted digitalcurrency, but for most people, it also increases the difficulty of knowing theworld. It is more urgent and important to explore the nature and source ofmoney.

In this latestmainstream encrypted digital currency, it is claimed to be convenient for theworld. The first sentence of the white paper is: "Libra's mission is tobuild a simple, borderless currency and financial infrastructure that servesbillions of people." According to the white paper, Libra is based onblockchain. The foundation, the real money guarantee, the global currency withindependent association governance. This is obviously not the same as thetraditional currency, bitcoin and all kinds of smash hit "air coins".

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This is of courseanother evolution in the phase of encrypting digital currencies in the historyof human currency.

I once wrote anarticle in the 21st Century Business Herald entitled "The blockchain willbring the world back to power", reminding people not to be too optimisticabout the empowerment of this new technology, but also clearly It is pointed outthat the wide application of blockchain technology, including encrypted digitalcurrency, will enable the world to restore to some extent the power lost by thedevelopment of the Internet. Therefore, as soon as I saw Professor ZhouLuohua’s assertion in the book "The Origin of Money" that "moneyis a patch of morality," I couldn’t help but scream.

The book "TheOrigin of Money" was inspired by the discovery of a German anthropologistwho has participated in the excavation of archaeological remains. His diary hassuch a record: "Where the site of the old man or the patient's cheekboneis dug, the shell is often dug. Coin; otherwise, no currency was found."

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After all, ZhouLuohua is a descendant of the famous anthropologist Zhou Gucheng, so hisinvestigation of the origin of money is more like an animal behavior or historywork, and its conclusion seems to greatly exceed the imagination of the financemajor, that is: currency Birth comes from "repaying" favors ratherthan "exchange" items. In short, he questioned the argument thatmoney originated from “exchange” in traditional theory, and believed that thismay have evolved from a reward and punishment mechanism within the tribe. Thepurpose of establishing such a mechanism is to maintain the moral system withinthe tribe.

"The Originof Money" discusses the evolution of human beings and their morality inconsiderable length, especially in the two chapters of "Pre-History ofMoney" and "The Birth of Money". It is also a rich and colorfulstudy of the history of human virtues. Its basic conclusions are in line withmost anthropology. Home's point of view: Morality is the product of humanevolution and a cooperative mechanism. But more importantly, the author furtheremphasizes that in this process, “morality is not only forced to be produced inthe process of evolution, but itself is also flawed.”

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Therefore, in hisanalytical framework, money does not appear alone, but has morality, thenmoney, and no money, and morality is difficult to maintain. In a nutshell,money is an enhancement of the moral system. The reason why money is importantis, first of all, because morality is important, because the moral system isrelated to the basic norms of human behavior, and it is a matter of life anddeath.

This is indeed aconclusion that is more profound and essential to the currency. Some peopleintuitively hate the monetary system, are tired of money, are even enslaved,and are distorted. They are indeed the root of many pains and disasters incapitalist society, but if you look at the longer history of mankind and thecontinuous efforts to pursue progress and equality, It will be more calm andobjective to see the fundamentals and the overall situation. “Currency providesan effective incentive mechanism for the moral system, and can even treat moneyas a quantitative enforcement mechanism for the moral system.”

But can moneysolve ethical problems? Of course not. According to the logic in the book, thereason is very simple, the currency is just a moral patch, and patching aloneis not enough. There is a moral paradox here, that is, the fairness behind thecurrency should be reflected. If the fair society that the monetary systemrelies on has its own problems, the monetary system can not only play a goodrole in maintaining the moral system, but also create new problems. Even itselfis a source of risk, such as triggering financial crises and social unrest. The2008 global financial crisis is a very typical example. As Professor D. Darus,Dean of Dartmouth College of Business, said: "Every financial crisis is acrisis caused by moral loopholes. Therefore, the primary task after everyfinancial crisis is to block the loopholes in corporate governance. ”

The financialcrisis is actually a moral crisis. Therefore, only countries that advocatemorality and protection and innovation will have a long-term bull market andreal scientific and technological progress, and noble investors will choosenoble companies to make progress together. In the ecology of a speculativeculture and cutting amaranth, no one will pursue virtue.

So, does thedigital stability coin Libra also mean a new evolution of human morality?

This isdeterminable. With the development of the Internet and financial technology,the moral hazard of the monetary system and the possibility of obtainingimproper benefits and dismissal from it are greater. The data and otherhigh-risk risks of leaking and stolen and the existence of financial algorithmsare Problems such as the possibility of manipulation and discrimination arebecoming more and more prominent, and related systems have become extremelyurgent. Affected by technological advancement, long-term commercial interestincentives and market competition, the “moral” patch of the Internet era in themonetary system through blockchain and other technologies is itself part of theevolution of the human moral system.

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People can waitand see on this.

This article waspublished on June 22, 2019, "21st Century Business Herald"

Author | Benli(Northern Hope)