What Happens When “Unit of Account” Takes Precedence over “Store of Value”

How shifts go from small to big

“And forgive us our debts, as we also have forgiven our debtors.” How did debt, a moral obligation, become associated with sin? It's a long story.

Debt in this sense of social obligation was recorded in the Sumer civilization around 3,500 BC. “I owe yous” (IOUs) were used as a credit system well before coins appeared in 600 BC. The introduction of a thing outside the obligation, created a new layer of meaning.

Opportunists didn't miss a beat. Interest swiftly followed, with associated human effects. In his exploration of Debt Anthropologist David Graeber explains that economists referred to money in three ways: 1./ medium of exchange; 2./ unit of account; 3./ store of value.

From something born to measure and keep track of a promise, money became the end. Which continues to justify the means.


From tallying to impersonal arithmetic

John Oliver bought $10 million of US medical debt for $60k. He did it to expose the business of buying and selling US debt. (h/t Nick Parker) If it feels impersonal, it's on purpose. Once you start thinking in terms of principal, balances, penalties, and rates of interest, a deal is a deal.

Except for money is just money sweeps the entire human experience associated with what the other party wants and needs under the rug. Another way of saying this, “it's just business.” The sad part is that there's none of the original intent of commerce in the expression.

This kind of thinking justified things like trading children, women, and indenturing people for life. Exchange in common narrative became associated with violence, crime and recompense, war and slavery, debt and redemption.

When banknotes were introduced, they were a promise to pay a certain amount of real money (gold, or silver) of the same value. But the value of a unit of currency is not the full measure of value of an object. In fact,

it is the measure of trust

in another human being.

Oliver wanted to make a point. Or maybe more than one. Going through the process clarified the subject of investigation. But it also achieved a collateral benefit for 9,000 people. Two actions that alone pass the test for value.

Debt forgiveness has a storied tradition.


From arithmetic to meaning

Bank Job

The cold, some would call it inhuman, accounting has no meaning. We need to put meaning back.

To illustrate, we turn a vessel of meaning, art. A filmmaker and an artist got together with a producer and an activist art project was born. Bank Job printed its own banknotes, sold them, then used the proceeds to buy up and write off a million’s worth of debt in their local community. (h/t Nick Parker)

What these artists did, printing their own money, created value. Given the number of people involved, their collaboration, and co-creation, the process built value into those slips. In fact, they were not mere banknotes, they became symbols of a story.

Buying a story

Because of it met the tests for value, the story went viral. Thus, more value was transferred to more people. Social energy sold the banknotes. What remains to be seen is: can a story sway a larger narrative?


The big shift

When enough people buy the story, something shifts. John Hagel's work has been focusing on the movements behind the big shift for more than twelve years. I remember speaking with him about the move from transactions of relationships beyond the edge.

The long-term forces reshaping the world are now wrapped around a paradox: every company and person recognizes the importance of trust, yet trust is eroding in all institutions. There's mounting performance pressure.

Competition and the pace of change create fear of not measuring up. Big feels scary. Nobody wants to bet against the house.

But there are more examples of small shifts popping up. And that is good. Because as anyone who's practiced music and sports at length knows, small shifts in posture can make a big difference.

Perception of skill is only part of the equation. In this new arithmetic of meaning, perception of will matters. And that's where we come full circle with obligation. Respect and gratitude account for the needs and wants of the other party.

Better performance requires a shift. There's one small shift in posture your company can make. When you go from knowing to learning you can tap into the stored value of what's next.