Previous
Chapter 15
Themes
Key
LitCharts assigns a color and icon to each theme in Sapiens, which you can use to track the themes throughout the work.
Foraging, Industry, and Human Happiness
Fiction, Cooperation, and Culture
Science, Wealth, and Empire
Human-Caused Ecological Devastation
Summary
Analysis
Now considering modern economies, Harari notes that banks in the United States can give loans for 10 times the amount of money that’s actually in their vaults. Harari calculates that ninety percent of the money in people’s bank accounts around the world isn’t actually covered by coins and notes. It seems like this sort of set up is a big fraud, but to Harari, it looks more like an exercise in human imagination. He thinks the “entire enterprise is […] founded on trust in an imaginary future.” The system of giving credit works because banks and people trust that they’ll earn money in the future, to pay back loans. It essentially enables people to spend their future income today.
Here, Harari looks at how capitalism creates wealth. It centers on the system of lending credit to entrepreneurs and then taking a cut of their profits later. Harari emphasizes here that capitalism is an imagined order—it’s a system in which people trust that businesses will generate wealth in the future, so they cooperate by investing in new ventures in the present. As before, Harari stresses that capitalism (like all imagined orders) works because it makes strangers cooperate.
Themes
Credit has existed in human cultures for a long time, but Harari thinks that in the past, humans didn’t trust in the future as much, so they were more cautious about extending it. This meant that it was harder for poor people to finance their ideas for future wealth. To Harari, the Scientific Revolution made people believe that humans don’t know things, but they can learn them and improve, which made them believe in progress. This idea, he thinks, also had force in economic circles. People began trusting in the future, extending credit, and allowing businesses to grow.
Harari thinks that the scientific attitude of building knowledge by exploring, learning, and discovering facts about the world made humanity shift into a mindset of believing the future would be better than the past. This belief, he thinks, encourages lenders to trust in the future and feel more confident about extending credit to businesses. He stresses this to show that scientific thinking bleeds into all aspects of society, like economic practices.
Themes
In 1776, Scottish economist Adam Smith published The Wealth of Nations. Smith argued that when businesses make more profits, they can expand their businesses, and therefore generate more wealth for everyone. This is the basic principle of capitalism. Of course, Smith assumed that people would use their profits to invest in society, not hoard the money for themselves. To Harari, this idea of reinvesting profits and increasing productivity is a very modern idea. Harari thinks that capitalism began as a theory but it soon grew into an “ethic—a set of teachings about how people should behave, educate their children, and even think.” Harari sees capitalism as a “new religion.”
Harari argues here that capitalism is an imagined order. He stresses that Smith’s book, The Wealth of Nations, sets out a set of rules that tell people how to cooperate so that society can flourish. The book, in a sense, functions like a religious text or scripture—it centers on a belief that amassing money through trade will make societies flourish, and it encourages societies to organize themselves around that principle. Harari thinks that since the book’s publication, many societies have shifted towards organizing themselves to maximize earning wealth from trade, so much so that it affects all aspects of modern living—it even shapes what students study, the kind of work that people in a society do, and the goals that they work towards. Harari, thus, thinks that capitalism is an extremely powerful imagined order.
Themes
Capitalism, says Harari, has a profound influence on modern science. Private businesses often fund scientific research when they think it will improve their profits and help their businesses expand. He thinks capitalism also depends on science—banks keep pumping credit into the economy, desperately waiting for scientists to come up with the next big money maker before their credit-bubble bursts.
Harari stresses that businesses and corporations often fund scientific research when they think its discoveries (like new technologies) will allow them to gain wealth. As before, Harari argues that science is never just a neutral endeavor centered on learning about the world. Here, he emphasizes that science often serves economic goals like the pursuit of wealth.
Themes
Get the entire Sapiens LitChart as a printable PDF.
Harari thinks that before the 18th century, when Asian societies dominated in the global market places, kings looked down on merchants, and they funded their efforts through taxes. In Europe, however, which was poorer, kings had to think more like merchants, and invest in lucrative ventures to generate wealth. Columbus, for example, needed a financer for his grand plan to sail around the world, and he pitched the idea like an entrepreneur to several kings and queens. Queen Isabella of Spain took the gamble, and she ended up generating wealth for all of Spain by conquering the Americas. Subsequent generations extended even more credit—because they trusted that investing in the Americas would pay off.
Harari underscores capitalism’s power as an imagined order (a set of rules for how societies should function) by showing how it began to infiltrate pre-existing imagined orders (like the divine right of royalty to rule). He shows that Queen Isabella shifts from acquiring wealth by seizing taxes from her subjects (based on the belief in a God-given right to do so) to investing in a potentially lucrative project—showing that her choices mirrored the way that capitalism works.
Themes
In the 16th century, the Netherlands was a small “swamp” under Spanish control. The Dutch revolted in 1568, and within 80 years, they’d built an empire that surpassed Spain’s. Harari thinks the Dutch’s secret was credit. They financed their armies and fleets by convincing other rich kings and queens to bankroll them in exchange for future profits. Harari wonders why the Dutch were so good at getting others to trust them. He says they were known for repaying debts in full, and on time. Dutch laws also protected individual property against the whims of the Dutch king. This enabled private Dutch entrepreneurs to use their property as leverage to strike deals, meaning the merchants—and not the kings—built this empire.
Harari shows that capitalist thinking shaped a bourgeoning nation (the Netherlands) in the 1500s. He emphasizes that capitalism is a powerful imagined order. By seeking credit to fund new business ventures, the Dutch managed to cooperate (with each other and with other nations) on a grand scale, effectively made their society flourish into a colossal empire. The rise of the Dutch empire made many nations in Europe shift to a similar model. As before, Harari notes that imagined orders tend to stick when they’re effective at facilitating cooperation and making societies thrive, not because they’re fundamentally true or fair.
Themes
The Dutch stock company Vereenigde Oostindische Compagnie (VOC) even hired armies and built forts, effectively colonizing Indonesia, solely for commercial purposes (to trade goods from Indonesia with Europe). Another Dutch company, the Dutch West Indies Company (WIC) colonized a part of the Americas for trade purposes. Their land eventually fell to the British, and became New York. The Mississippi Company (a French company) also colonized part of the Americas (creating New Orleans) purely for commercial purposes—the company sold shares to finance its efforts, but ended up causing a huge stock market crash when people lost confidence in the project, which sent the entire French nation into a recession. Many British imperialist exploits were also privately funded commercial initiatives.
Harari expands on the activities of the Dutch (and other European nations) to show that once capitalist thinking became entrenched in the human populace, it began to take over as the dominant imagined order. In the past, individuals in a society would help their ruler to conquer territory because they believed it was their ruler’s divine right to do so. Here, individuals start investing in companies that conquer territory because they think it will make them rich. Harari thus shows how capitalism (and faith in businesses) began to replace monarchies (and faith in kings and queens).
Themes
Companies and corporations also gained power on their home turf, Harari explains, noting that they even convinced governments to fight wars for commercial reasons. After the Chinese government banned opium trafficking in the 1840s, they began seizing private British drug merchants’ opium supplies. The merchants lobbied the British government to declare war on China—and they did, thereby seizing control of Hong Kong until 1997. In the 1800s, Greeks seeking independence form the Ottoman Empire also sold bonds on the London Stock Exchange to finance their rebellion. They eventually gained independence, but became indebted to Britain for decades as a result.
Harari continues explaining how capitalism displaced other imagined orders by showing how capitalist interests began to shape government activities. Here, he shows how governments begin making choices (and even starting wars) to protect the interests of businesses that generated wealth for the nation. Harari wants to stress that capitalist thinking is so pervasive that it has completely shaped the modern world—it even establishes nations on the basis potential monetary gains.
Themes
Harari thinks about people who believe in the free market, and they argue that governments shouldn’t regulate, tax, or otherwise interfere with trade. Harari thinks this a really naïve perspective. Harari thinks capitalism only works if people don’t cheat the system—because cheating, lying, and defrauding people causes a lack of trust, which makes markets crash. He believes that governments should intervene in the market to ensure that people can still trust the system. Another thing that governments can do is make sure profiteers don’t exploit their workers. He thinks about the African slave trade, which Europeans used in their new plantations in the Americas—all to make more profit.
Harari discusses some of the social problems that capitalism has caused—like creating the African slave trade for monetary gain—to show, as before, that imagined orders (rules for how a society should function) tend to work because they’re effective at making people cooperate, and not because they’re good for humanity. He thinks every imagined order tends to privilege some people and oppress others, and he argues that capitalism is no different in this regard.
Themes
Harari thinks about a Belgian “humanitarian” mission to the Congo. King Leopold II of Belgium set up an organization to flush out the slave trade in the Congo, but his organization ended up seizing 1.4 million square miles of the Congo basin, and forcing the locals to farm rubber in exchange for protection from slavery. When the locals didn’t produce enough rubber, the organization punished them by chopping off their arms or killing them. Harari thinks that capitalism, like the Agricultural Revolution, might turn out to be a “colossal fraud”—the economy keeps expanding, but people are more miserable.
Harari uses another example (the Belgian subjugation of the Congo) to reinforce his claim that capitalism, like all imagined orders, is effective at getting people to rally around an idea (like gaining wealth through trade) and cooperate, but it’s not necessarily good for humanity. He emphasizes the persecution of native communities in the Congo to show that capitalism also posits a hierarchy—one in which business owners thrive, but workers are often forced to cooperate, and they’re badly exploited.
Themes
