How To (Re)Make Money

On the 75th anniversary of the Bretton Woods Agreement, a new financial era is dawning. Call it Money 3.0

- Galia Benartzi

MONEY IS ONE OF THE WORLD’S MOST WIDELY used but least understood technologies.

We often wonder how human society could have evolved—or even existed—without language. But could we have cooperated without money? Language enables us to share information, our inner worlds. With collaboration and trade, later improved upon by money, we share our value, in the form of our goods and services. Without people to use it with, money is powerless—and yet we live with the feeling that money holds a tremendous amount of power over us.

As we commemorate the historic Bretton Woods Agreement, which took place 75 years ago last month and ushered in the modern era of money, the world is on the verge of a new financial age— one potentially driven by people rather than financiers. It’s an appropriate juncture to take stock of how our system of money began, what it’s evolved into and where we go from here.

This much has been true throughout: Money functions as a collective accounting system, to help us keep track of who has given what to others, and thus who is entitled to how much from others. That’s it. That’s all money is supposed to do. But as we know, it’s far from that simple. What makes money work as intended is the shared willingness of many people to receive it in exchange for their time, things or knowledge. This network effect of belief in a particular money is the only actual condition for anything that we use as money to have value.