The Monkey's Paw (Part I)

The Blessing and the Curse of Interest

The Monkey’s Paw

The story of the monkey’s paw is a creepy old campfire legend. Perhaps you’ve heard it? In the tale, a mummified monkey’s paw grants three wishes to each person that comes to possess it. The catch is that the wish is always granted in some horrific way. In the 1902 original, a man wishing for enough money to make a mortgage payment gets his wish. But only because his son is mutilated and killed in a gruesome workplace accident, and he receives a cash settlement from the employer. The Simpsons did a hilarious send-up of this trope all the way back in 1991. In recent years, it has become a staple of internet culture. It’s a chilling horror yarn, but perhaps the enduring appeal lies in the cautionary “be careful what you wish for” twist. 

This essay is the first of three parts to come, leading up to Halloween. In recognition of the holiday, we will be drawing a parallel between that spooky severed paw and interest, of all things. That’s right, interest. As in: the extra money you have to pay to borrow for a car or a home over and above the repayment of the amount borrowed. The weird thing about interest is that virtually every single world religion has dire warnings against it. The Catholic Church took harsh proscriptions against usury in the Bible very seriously right up until the time of the Renaissance. The taking of interest is condemned by the Buddha in his sermon on the Eightfold Path. Islam still forbids interest-taking to this day. The skyscrapers of Dubai have all been financed with clever accounting work-arounds that at least keep with the letter of Sharia law, if not quite the spirit. 

We are in a situation where all of our spiritual traditions have dire warnings against the taking of interest, and yet our entire global financial system is built on it. What could account for this bizarre dichotomy? Are our religions simply old, dusty, and out of touch with the fast-pace and the bright lights of the modern world? These essays will argue precisely the opposite; our religions are containers for ancient wisdom that we are ignoring at our peril. Exactly like the monkey’s paw, interest is a cursed talisman. As an indispensable tool for society-building, it promises to make all of our wildest dreams come true . But we are about to find out (too late!) that using this tool comes with a terrible price...

Cooperation

Our bodies and our minds are so heavily adapted for cooperation that loaning our neighbor a cup of sugar feels satisfying on some primitive level. As well it should. Cooperation has been an integral part of our survival strategy for longer than we’ve been human. Darwinian evolution usually favors the offspring of those with the sharpest eyes or strongest muscles. But our ancestors ended up wandering down a totally different evolutionary path. Rather than honing teeth or sharpening claws, evolution outfitted us instead with comically oversized heads awkwardly balanced on top of lanky bodies. The large brain is our evolutionary endowment, and we have put it to spectacular use. 

These massive brain cases of ours severely complicate the birthing process, and the brains inside burn up a ridiculous number of calories. But from the perspective of Darwinian evolution, the juice is well worth the squeeze. That’s because our large brains grant us the magic of highly complex linguistic communication. It is the complexity of our language that sets us apart from other cooperative species. We can coordinate closely with others by linguistically swapping detailed mental models about the past, present, or future. Our brains evolved to the size they are to facilitate language, and language facilitates cooperation. Evolution has bequeathed to us the ultimate cooperation tool.

Dunbar’s Number

In the 1990s, British anthropologist Robin Dunbar proposed something called “Dunbar’s Number”. His hypothesis is that 150 people is about the maximum number of social relationships one human brain can juggle at a time. That’s roughly the same size as a hunter-gatherer tribe or a primitive Neolithic village. During the course of our evolution, our brains adapted to keep track of the approximate number of people that our ancestors were living with. Meeting a stranger would have been a rare experience for the hunter-gatherer. But post agricultural revolution, it became a part of everyday life. Today, most of us live out our lives surrounded by more people than we could ever hope to know personally.

The implications can scarcely be overstated. It changed every facet of human society. An informal understanding of rules and expectations, for example, might be totally workable for a small tribe. But not for a city full of strangers. To keep a whole city marching to the beat of the same drum, rules and expectations had to be written down as explicit laws. We traded the natural environment in which our sensibilities evolved, for a synthetic environment in which those evolved sensibilities were no longer relevant. Systems of codified laws were invented to make our tribal brains work in new-fangled urban environments. 

The most basic function of any economy is to relocate goods from people who have them to people who need them. This behavior arises naturally in a tribal setting where everyone knows each other. But when our neighbor is a stranger, we are much less likely to loan them a cup of sugar. Assisting a stranger doesn’t have the same emotional register that helping a friend does. And it’s unlikely that a stranger will be there to return the favor down the road. In order to scale up into groups larger than Dunbar’s number, informal credit arrangements weren’t going to cut the mustard. We needed a system for borrowing and lending among perfect strangers that no longer relied on any existing social relations. We invented interest to facilitate this activity among strangers.

Interest

Interest was invented by the ancients of Mesopotamia to get around a classic chicken-and-egg problem. How do you get new farms off the ground when there is such a long time gap between the planting season and the harvest? This problem was solved by local temples, which began loaning out grain to would-be farmers. The farmers then paid back the grain they had borrowed six months later when they harvested their crops, plus a little extra to keep the temples in business. And so it was that the invention of interest was a crucial part of building out those first cities that popped up after the Agricultural Revolution. Remember, we are not talking about money just yet. That will come millenia later. At this point, you should simply be picturing tally marks on clay tablets and sacks of grain. It was nothing but a formal credit arrangement that moved extra grain where society needed it to go.  

In the next part of this essay, we’ll explore the ways in which interest, like the monkey’s paw, is a cursed tool. Why do religions forbid it, given how indispensable it was in getting the first cities off the ground after the agricultural revolution? Come back next week, dear reader, to find out!