Geography and Money

The article provides a sharp criticism of the Russian economy throughout its existence in the conceptual field, and presents a forecast of the formation of a new world economy. The historical field shows the evolution of money and its functions, gives a geographical interpretation of money and the main geographical patterns of their placement.

For almost seven centuries now (or even more), there has been a tyranny that, according to Aristotle, differs from monarchy by the illegitimacy of the transfer of power. It means, with rare exceptions, murders, usurpations, coups, revolutions, plots, vagaries, etc [1-7]. It is no wonder that all these events are often accompanied by continuous and rampant thievery as the most striking manifestation of lawlessness. It was probably Konstantin Tolstoy, a Russian writer of the 19th century, who described this situation in Russia in one word: "Voruyut!" ("They steal!"). In 1830, Kyiv was deprived of the Magdeburg right due to the fact that the local authorities plundered the city treasury for ten budget years in advance. During 70 years of Soviet power, the Bolsheviks, headed by their leaders, plundered the country, its wealth and mineral resources, robbed their own people. The current leaders are an even greater marvel of greed and covetousness. The country has not accumulated any progressive capital, remaining merely a raw material appendage of the developed European countries and a supplier of weapons for everyone who can't just get along. Unlike Western countries, throughout its history, Russia has witnessed the supremacy of politics over economics, political over economic in social life, as well as supremacy of political passions over administrative and economic ones. The economic "system" of the country is still Soviet at its core. Strictly speaking, the naive form of economic management that emerged immediately after the revolution due to the efforts of economically incompetent and ignorant people survived to this day. In this vein, the Soviet monopoly enterprises of 1918, including Glavsvechka, Glavspichka, and Glavdrova, are not so different from today's corporations such as Gazprom or Rosneft. They are all ugly, rigid, and clumsy. That is exactly why situational and operational management in Russia is replaced by long-term planning which allows no change or development. This economic "system" is characterized by economic coercion (which is nowadays called encumbrance) and forced pricing (when prices are dependent not on the interaction between demand and supply but on a third party, powerful and political). One of the organizational factors of the economy for many centuries has been the so-called "state goals and interests". Each time they turned out to be the goals and interests of the ruling coterie or a master tyrant. One of the centuries-old paradoxes of the political and economic situation in Russia is the fact that both politics and economics have a fundamentalist (parallelist) nature, while the financial market is opportunistic (non-parallelist) in grain. This makes the incoherence of the economic sphere with regard to the economy and finances inevitable.

Modern economy or, according to Aristotle's definition, chrematistics (the art of acquisition) is going through a major crisis that can turn into a total wreck when reaching the limit [2].

Throughout the history of the economy, money evolved in the following way:

·         women, slaves, cattle

·         Primitive money (cowrie shells, squirrel or marten pelts, nogata, etc.)

·         metallic coins

·         paper currency

·         non-cash money

·         local currencies

·         cryptocurrencies (bitcoins, etc.)

These money evolution stages have some common trends and tendencies, specifically the following:

·         The further the process goes, the more virtual and volatile money becomes

·         The further the process goes, the more symbolic it gets

·         The further the process goes, the more off-limits to the masses money becomes

·         The further the process goes, the more fragile the system gets

Throughout its history, chrematistics is characterized by "taxes on”: On property, real estate, income, activities, etc.

The last two centuries have passed under the banner of technologization, which triggered both the rapid growth in labor productivity and an ethical cataclysm: Now no one is responsible for the integrity of the working process and the product of labor, since this process is divided into plenty of specific procedures and operations. The sequence of these procedures and operations is called technology. Today, true workers and laborers are almost gone (except for poets, philosophers, painters, and composers), but instead, the cast of office-based employees has become widespread: These people are paid for their working time. Deep down, we hope for salvation to come, manifesting itself as the creative class, but it is such a weak hope since the entire technosphere, anthroposphere, and even, to a certain extent, noosphere are technologized. In opposition to chrematistics, the economy as the art of household management is shaping up, or rather, resurrecting: Local economy and local currencies, as well as the gift economy. Together they restore the ethical values we've already lost and the values we are losing, first of all, Protestant ethic, the ascesis of hard work (indutria), and salvation through vocation (Beruf, Calling). This type of economy is characterized by "taxes for”. Self-taxation for land improvement, charity, local projects and affairs. Perhaps also a new, "game" economy lies ahead. Here are two metaphors to describe this type of economy:

In Brazil, there is a tiny underground lottery for the poor that came into being as an opposition to the official state lottery: The poor can't afford the latter, and, what is most important, it is the gambling poor who understand that there is no point in playing with the state. The state will always win. That is why this illegal lottery with zero-sum games is so popular. It's rather about feeling the thrill of competition than about winning;

While professional players (Manchester United, Barcelona, Bayern, Boeing, Colgate, Lloyd, etc.) play on the field, the stadium tribunes are full of people who want to play too. But they can't play against Messi, Ronaldo or Elon Musk! And that is why they stay on the tribunes, making tiny bets offered by illegal, quasi-legal and legal bookmakers and therefore playing too! The weakest player in the confrontation between modern money, global cybercash, and local money, is apparently modern money and that is why it is doomed to perish in the process of the evolution of money. Local and global money will be separated by membranes (semiconductors), just like spectators in a modern stadium are separated from players by bars and policemen: Global money can be converted into local money but local money is not exchangeable.

Infrastructure always requires redundancy (otherwise, it turns into service and loses its intrinsic properties). The redundancy of the financial infrastructure is ensured through the abundance of money. By this, we mean not the money supply but a variety of types of money, from the familiar (gold and other monetary metals, stocks, bonds, letters of credit, and other financial instruments) to exotic ones, both circulating and potential (vodka, clean water, time, ideas, projects, myths, utopias, activities). In ancient times, money became a symbol of products. Together, they formed the concept of "goods" (the word "symbol" derives from the Greek word "together", "the second half"). The time is coming when money itself will get cluttered with various symbols, equivalents, and synonyms. Humankind boxed itself into a technological corner which requires a transition of the concept of infrastructure from a testing ground and a conglobulation of technologies towards a set of reproduction cycles that together form the polysphere. In this case, the following reproduction (cyclic) processes should be considered as leading ones:

·         Recycling

·         Reusing

·         Renewing

·         As well as other numerous reproduction processes (reincarnation, resuscitation, reproduction, rebirth, return, etc.)

Alongside the aforementioned cycles, compact (both in time and in space) ephemeral twisters of ideas, projects, utopias, etc. are shaping up too. While these twisters "hover" in a homogeneous environment or sphere, nothing happens, but as soon as a twister's foot is formed (as soon as it is able to contact with and penetrate into other spheres), a "vortex" is released. This vortex is called innovation. Gradually, very slowly, we are moving towards the polarization of our world: We will occupy the vacant and specially protected lands with corresponding polarized places, bearing a harmonious and naturalized polysphere of territories, landscapes, and sceneries, disturbed by the invigorating whirlwinds of innovations.

Formally speaking, there is no geography without history. And for the theme of our discussion, history is particularly essential.

A Brief history of money

In Ancient Egypt, trade was practically prohibited. That is why money was rarely used and often appeared to be gold and silver bars or copper spirals. In China, there was an agonizing search for money equivalent: Rice, salt, paper, etc. However, all these attempts ended tragically. In India, gold circulated between the rajas (it was basically hoarded), while silver was a currency of merchants and copper was the currency of all the others. Money became a regular occurrence in Ancient Greece which created a peculiar symbolic economy ("symbol" means "half" in Greek), where the product turned into an item of goods only after acquiring its specific symbol, i. e. price and some description. This system gave birth to modern price lists, bills of lading, instructions for the use of medicines, and other documents. Ancient Greeks, who used small cattle as money (pecos), quickly realized that this kind of "money" is prolific. As a compromise between the owner of the livestock and its holder, the idea of interest emerged. Even back then, the interest rate amounted to 30%. Money as a widespread phenomenon is indelibly linked to the market economy. And it's a curious chapter in history. In his book "The Germania", Tacitus says that the Germanic tribes of the 1st – 2nd centuries led a semi-nomadic lifestyle: They spent two years wandering and then returned to the abandoned camp to spend another year engaging in crop farming in order to have enough grain for the next three years. They would find their camps by the smell and heaps of droppings around the perimeter of the camp, by these marks. During the period of early feudalism, peasants who settled upon the land paid rent (mark) in kind to their margrave (markgraf/feudal landowner). Excess payments entered the barter market [5]. The situation changed with the beginning of the Crusades. Marktplatz is still a central square in many Central and Eastern European cities, including Russian ones. In Scandinavia, such squares were called tork/torg, which means "square": Hence the origin of the Russian word "torgovlya" (trade). Feudal knights, starting for Palestine, had to exchange their real property for movable assets (weapons, horses, squires, and soldiers of fortune). For that, they had to melt down family silver to make coins. The turnover of money drastically increased and began to displace bartering in the market. The second factor of the rapid development of monetary circulation and trade comes from the Age of Discovery and the gushing flow of silver and gold from the New World. Paradoxically, the countries that stood to gain from this flow were Germany and Switzerland. They were in the shadow of the process and had to pit their ascesis of non-acquisitiveness and hard work (Lutheranism and Calvinism), as well as their Protestant ethic which constituted, according to M. Weber, the spirit of capitalism, against rolling in gold Spain, France, Portugal, and England. The third reason was the rats: The import of rats into the port cities of Europe led to the spread of terrible pestilences, primarily the plague. These pestilences wiped out up to two-thirds of the population of Europe. Depopulation resulted in the fact that professionals and the fruits of professional labor became scarce. Previously, hired labor was despised (according to Cicero) or didn't exist at all: Peasants did not work for hire; they were owned by a feudal they worked for. The introduction of hired labor gave rise to the pricing and consumer market model. The 16th century went down in history as "The Little Ice Age": 84 years of this century were lean. The famine was so severe that human flesh was sold in the markets of France [3,8] and caused more deaths than any pestilences. This greatly affected the shortage of workers and professional skills. And finally, Jews became yet another reason for the growth of money turnover. After the Reconquista was complete, Queen Isabella ordered all Moors and Jews who refused baptism to leave the Iberian Peninsula. They were banned from taking away money, objects of value, and such. Many Moors went through Gibraltar and Tarifa to Africa, while Jews went through the Pyrenees to Europe. Before leaving, all the Jews had to make up a property inventory (it was initially called a membrane) in the presence of a rabbi and eleven witnesses. With this piece of paper that was technically not worth a penny, they got underway to produce it in a fellow subject's bank somewhere in Lombardy, in the hope of securing a credit equivalent to the sum of inventory. Soon those membranes received the name of banknotes and turned into paper money. They were not real money and that is why we will call them finances. Money (metallic coins) and especially finances have become the most important tools (financial instruments) of the market economy and its institutions (financial institutions), including banks, loan offices, insurance offices, trusts, pawnshops, stock exchanges, etc. Suffice it to recall that the first bourse in Bruges (16th century) was set up by Jewish brokers. The term "bourse" probably appeared because the sign of three purses ("borse") hung on the front of the house where merchants met. Exchange trade (without any goods) first used metal money. Traders' wallets were stuffed with coins. Then exchange trade developed its own financial instruments, futures and options. Money is a fairly modern phenomenon, however, the quite objective laws of money had been formed and formulated in the course of economic history long before we were born. We will only mention two of them.

The Fisher equation

MV=PQ

Where: M is money supply,

V is velocity of circulation,

P is price of goods,

Q is quantity of goods

Due to the extensive trade infrastructure, cities manage to sell and resell the same goods several times. An increase in the money supply velocity also causes the rate of inflation to increase.

Gresham's law of the monetary systems (the Law of Hoarding)

Bad money tends to drive good money out of circulation: For instance, nobody is willing to part with gold, hereby turning it into a treasure (thesaurus). Gresham's law underwrites the activities of counterfeiters: Everyone tries to get rid of dubious money which, as a result, rapidly gets into circulation.

To a great extent, money disagrees with geography and geographical analysis: it strives for cosmopolitanism, while geography looks for spatial differences. Maybe, this is exactly the reason why most geographers suffer from the lack of money. Cowrie shells, scattered along the shores of the World Ocean, were used as the first means of payment. They meet all the requirements applied to money as a universal store of value and, therefore, a universal medium of exchange, payment, and accumulation:

·         They are beautiful

·         They are all the same

·         They are timeproof

·         They won't deteriorate

·         They are of no practical and utilitarian use and are therefore completely useless beyond the scope of exchange and trade.

Various ancient currencies within the Ecumene laid claim to being cosmopolitan, including Greek talent, drachma, obol, and lepta and Roman denarius, quinarius, and sestertius. Crucially, any currency all over the world represented the trimetallic (gold, silver, and copper) or bimetallic system. Only recently, mints began using nickel and alloys. Even in the Middle Ages, when monetary diversity flourished, all European coins were freely convertible: Doubloons, florins, guilders, thalers, marks, piastres, guineas, pounds, ecu, francs, and other coins could be freely exchanged in almost any European city, though the reputation of many currencies was sometimes greatly tarnished by the "weight reduction" of money and the introduction of various admixtures, which even included clay. Money in Russia and in ancient Rus wasn't really money in the usual sense of the word, neither in their origin was (tamga a customs tax to the Golden Horde) nor in their nature: Kyiv princes paid off their bogatyrs with grivnas. Those were necklaces made of silver. A ruble was considered to be a cutout piece of the grivna. The depreciation of the Moscow ruble compared to the Novgorod ruble under the rule of Ivan the Terrible was so severe that the unfortunate Novgorod was finally drowned in blood. The government of Tsar Alexis Mikhailovich tried to issue copper money in large quantities to equate them with silver money which led to the Copper Coin Riot. Peter I, after the decisive victory over the Swedish Empire forces, nearly introduced the wooden ruble. Stalin and Khrushchev personally set the official exchange rate of the ruble, as well as its gold content, and these are just a few examples. Today, there are four global currencies in the world: Dollar, euro, pound sterling, and yen. The Chinese yuan is also heading towards the big four, but that's it. These five currencies are hardly a vast geographic footprint. The Jews, these same old cosmopolitans played a prominent role in the cosmopolitanization of money circulation by means of paper money (at the turn of the 16th century).

The introduction of membranes (also known as banknotes, future promissory notes, and letters of credit) caused the devaluation of money. Its value was measured by the weight of gold and silver (and copper) and equated with the value of goods. Paper money and finances that originated in them are fragile, ephemeral, have no direct bearing on goods and services, and therefore are risky and fraught with crises, in particular, crises of credit and trust because it is generally assumed that something real and valuable lie behind these pieces of paper or computer bytes. Though, in truth, there is nothing of the sort. Finances are secondary money that is even more conventional and virtual than the universal equivalent to everything. And these convention and virtuality, as well divorcement from the real economy, and even more so from the household management, turn financial instruments into an even riskier means. While money goes for convertibility, finances, for all their pronounced cosmopolitanism, is always specialized and functional, and therefore it is hard to imagine a pension contribution that is exchanged for a bill of exchange, a letter of credit that is exchanged for a block of shares, or a loan that is exchanged for an insurance policy, although it is exactly this kind of frauds that was highly popular and widespread in the first half of the 1990s in Russia that yearned for both real money and real financial instruments after the period of Soviet power. One of the most important financial instruments is investments. During the Soviet era, capital investment financing (that was the name for investments back then) was consolidated in the State Planning Committee, the State Construction Committee, and the State Bank (Ministry of Finance) of the USSR. Every business executive dreamed of getting into the State Planning Committee limits: Even those investment objects that were included in the five-year plans (these plans basically acted as state laws) were not guaranteed to get into the State Planning Committee limits. Planned and reporting information on the capital investments, as well as on their territorial and sector-specific profiles, was kept in strict confidence and wasn't available to researchers, including geographers. Perhaps, that is what accounts for the fact that Russian geography lacks serious influencers, traditions, and methods of investment analysis. Transport, Transfer, and Transactions (Financial and Cash Flows) as an Object of Geographical Research. It is clear that tangles of financial instruments and money also spawn more intensive flows. In the real economy, it is inconceivable that 80–90% of the country's finances and money are concentrated in one and the same place, while transport and economic links between cities and regions only run through the center. However, financial geography tolerates such madness. This super-concentration of finances is typical of all the fields of the world economy, though in a much more moderate shape. New York, Chicago, London, Paris, and Tokyo are the quintessence of the global financial system. But in this case, Zipf's law should rather be applied: The level of finance concentration in the N center is equal to the level of finance concentration in the first city (New York), divided by the rank of the N center. According to Fernand Braudel, goods are usually sold eight times on their way from the manufacturer to the end consumer. The intensity of transactions in the financial market is usually even higher [8]. Nowadays, thanks to the Internet, transfer and transaction rates are close to zero-transportation, the dream of science fiction writes of the second half of the previous century (zero-transportation is the term introduced by Arkady and Boris Strugatsky in their science fiction novels with the fictional future setting called "The Noon Universe" (Russian: "Mir Poludnya") – a fantastic method of transportation without loss of time). Strange as it may seem, these absolutely insane, fantastic rates made the financial and monetary system even more vulnerable and risky. Now money can be made and wrung out of thin air. Whereas feudal lords of the beginning of the second millennium BC had to spend months or even years to exchange their real property for movable assets, today such a transaction, property transfer from hand to hand, takes even less time than shaking hands. Today, financial movements and transport are kept off the radar for commercial reasons. However, as early as only 20–30 years later, people will be genuinely surprised at why we and our ancestors were trying so hard to keep in secret something that should be plain to see. Any financial institution (bank, stock exchange, insurance company, pension fund, trust, etc.) is just a trick that encompasses a plenitude of incoming and outgoing flows. With modern means of communication, this trick can be both virtual and fragmented into many tiny tricks. If this is the case, then our traditional decent geography won't be able to do or analyze anything.

The geography of activities is yet young. We have a good knowledge of production geography. Much less we are competent in consumption geography. We know nothing about the reproductive geography and we are absolutely blind to the geography of activities and the geography of financial activity, in particular. It is clear now that the distribution (transport) of finances is not channeled in any way and has no institutionalized "communication routes." Swift (Society for Worldwide Interbank Financial Telecommunication) is a very cumbersome international interbank system for transferring information and making payments. It was founded in 1973 and includes more than 9,000 banks from 209 countries (as of 2010). It covers only the banking sector of the financial market and only partially. It is also clear that, just like radiation and neutrinos, finances are all-pervading and, like neutrinos, are believed not to have any rest mass at all, are in constant motion, therefore, it is extremely difficult from a geographical point of view to hold them fix and locate. The formula for making pizza in any pizzeria includes the cost of all pizza ingredients and its final price, which can include even the cost of home delivery. It's a financial transaction well-cooked at 500 ºF. What is the point and sense of financial activities? The hypothesis involves the simple idea of formalizing the relationship between administrative and economic entities. If today's economy (chrematistics) is the art of acquisition, then the economy as the art of household management (or, to be precise, the art of housekeeping) can also exist and it does, for example, in the form of the gift economy, and, therefore, there can be other economies, other finances as well. If social and financial technologies dominate in chrematistics (society as a means of finance or wealth accumulation), then financial and social technologies should dominate in the gift economy (finances as a means of growth in prosperity). A loan can, just like it does nowadays, have positive interest rates. But its interest rates can be also negative since the money of the future is always worse and less reliable than real money. Financial activity as such is meaningless. And the more meaningless money and finance are, the more intense the financial activity and its actors get. Thus, finances can act as an indicator of administrative and economic activity. The active trading in the financial market means the loss of the significance of other activities, in full accordance with Fisher's law: The less bread is produced, the faster it rises in value and the more intermediaries there are between the cropland and the grocery shelves, and thus, the longer the queues in the stores are. The shortage of goods in the late 80s – early 90s of the last century is a most striking example of it. Even W. Sombart (1863–1941) warned that the domination of the production and supply over consumption and demand in the market is inherent in the fact that it can become more profitable for a manufacturer not to produce goods since a shortage causes prices to rise [9]. This was brilliantly illustrated by the Soviet economy in the last decades and years of its existence. If we imagine the distribution of finances and the junction points of their flows as a map, we will see a map of life devaluation. We will learn that meaninglessness is the main backdrop to our life and the sources of meaningfulness are extremely rare, small-scale, and exclusive. Thus, we finally arrived at the key aspect of this article, to the concept of a financial place.

The idea of a place is closely associated with the acknowledgment of the discreteness of space. A place, like an event in history, is (or can be) an ideal object. A place is a unit of infinite space, just like a beat of waves of the beach is a unit of infinite time (the Russian word "raz", meaning "time" as in "time, and time again, and a third time", derives from the Greek word "???", meaning "a blow" or "to beat"). A place (top, locus, and situation) should represent the reduction of some spot in space, and therefore it is important to understand what is reduced and abstracted (i. e. raised to the degree of indeterminacy) and from what:

Coordinate determinacy is replaced by spatial indeterminacy which is expressed with such words as "somewhere", "here", "there", "over here", and "over there". A place is a trace of activity in space: Not every activity, and not always, leaves traces. A financial place, in our opinion, is the fragment of space in which financial instruments and money act as the dominant element of the goings-on and as their goal. To describe the construction (structure) of the concept of a financial place, let us prescribe a certain conceptual matrix. The gap between economically rational disposition and reasonable location is filled with the entire world minus economic rationality. And therefore, understanding the laws of location means understanding the laws of existence too. Or, we can just persuade ourselves that such laws do not exist, end of story. Let's try to single out some of the laws of spatial location, or, better said, the laws of appropriateness.

Every location strives to be what it is. The world resists changes with its every place and at the same time is susceptible to change in its every place. We can easily throw a stone into the water but the waves, travelling in concentric circles and created at the point of contact of the stone with water, quickly die out and the pond regains its former calm and unruffled appearance.

Any location tends to iterate the entire cosmos. Every place has everything that this place can hold and therefore everything new that appears in the given place displaces some existing things or deforms the existing things with its proximity. Americans do not banish wild animals and birds from their cities but staying in the cities, these living creatures turn into a loathsome company, into beggars, into enemies and victims of domesticated nature (pets and house plants) and technology (cars, roads, etc.).

Any location, even a completely artificial one, is a complex. A complex is a natural or naturalized combination. The process of naturalization includes the establishment of new connections and linkages that give a touch of completeness and perfection of place to the morphology of the material. We are meant to understand and feel this through the beauty and harmony of every place, even if it is a terrible harmony. Activity is not to be placed. It positions itself on its own in the course of its historical development. At the same time, intersections and intertwinements with other types of activities are also important, for example, intertwinement of winemaking with culinary and other arts, or with recreational activities. These intertwinements and combinations already make cause-and-effect relationships disappear. However, everything seeks connection with everything else, drawing its meaningfulness from both itself and its linked environment.

Any location is already performed and therefore perfect. Any act of disposition sooner or later "dies" in the location and finds the desired peace of a place. At the same time, space possesses the following properties:

Holism is the continuity of space in time. A historian is happy to cut time into periods and epochs, whereas a geographer cherishes the continuity of time, dynamics, the course of development, there is no timelessness for him or her but it's the opposite in history. Think, for instance, of any chronology: Only a tiny fraction of time is lined with events. Everything else is ignored. A geographer can only take similar liberties with space, while treating time with deep respect. Continuity is the continuity of space in space. A geographer rarely thinks about holes in space and cannot stand the speculations on interregional voids. A geographer can always find other places on the way from one place to another. And, despite the fact that a geographer thinks of the world in spots and areas, he or she always demonstrates professional fortitude, pulling such spots together. Districts are typical closed areas. Being morphologists in their nature, geographers transform the discreteness of the world into such indicators as density. We are talking not about the density of space but about the density of its content (population density, road density, grass or stand density, phytoplankton population density, etc.). Most often, the density, with its fundamental or devised threshold indicators, becomes the basis for dividing territories into districts, zones, etc. Geographers exist in both continual and discrete spaces. It is the discreteness of the world that makes it possible to draw boundaries which is a fundamental part of the work of any geographer, regardless of his or her specialization. Discreteness justifies the juxtaposition, location, and other objective characteristics of certain objects existing in space. With regard to money and financial instruments, this matrix shall be interpreted as follows:

1. Politeia AA. Russian translation by SI Radtsiga. Moscow, Leningrad. 1936.
2. Aristotle. The Economics. Russian translation and notes by GA. J Ancient History. 1969; 3.
3. Braudel F. The structures of everyday life. 2007; 2.
4. Sombart W. Modern capitalism. 1931.
5. Tacitus C. The annals. The minor works. Saint Petersburg, Nauka. 1993; 736.
6. Heidegger M. Being and time M. Heidegger; Russian translation by V. V. Bibikhin. Kharkov: Folio. 2003; 503.
7. Aristotelis. Athenaion Politeia. Edidit M. Chambers. Leipzig: Bibliotheca Teubneriana. 1986.
8. Braudel F. Les structures du quotidian.
9. Sombart W. Studien zur Entwicklungsgeschichte des modernen Kapitalismus. 1913.