Georg Simmel's Theory of Money and its Relevance for Current Neuroeconomics and Psychology

Abstract

The paper develops a conceptual framework for the neuroeconomic analysis of money that is based on recent theories of distributed cognition. In doing this, I show that a unique historical contribution to the theory of money, Simmel’s ‘Philosophy of Money’, receives full support by recent research in psychology and neuroscience. I take this issue as a litmus test that allows for a methodological evaluation of the recent Glimcher/Camerer controversy over the appropriate frames for neuroeconomics (neoclassical vs. behavioural), levels of analysis (basic reward circuits vs. higher-level concept/model based learning) and units of analysis (mechanisms versus emotions). I propose that the artefact of money activates emotions that embody social reciprocity, thus triggering distinct neuronal activity patterns that have been identified experimentally in the context of money illusion and other related behaviours. This shows how neuroeconomics can help to explain the peculiar functioning of human institutions without succumbing to neuronal reductionism.