24 Nov

The Social Life of Money – a Talk by Bruce Davis

This week, we had the pleasure of hosting Bruce Davis, the co-founder and managing director of Abundance Generation, an investment platform that allows sustainable and secure investment in the UK,. Bruce began his talk by admitting that although he had never worked in a bank, he has worked for several financial institutions and that this has inspired him to study money. He was in particular fascinated by the fact that money was always invisible until a problem arose, then it suddenly became visible. He argued that we as a society, don’t often talk about money in financial terms and often assume that we know what money is. We also often believe that money has an intrinsic value but in reality, it has no value if no social relations underpin it.

Social life of money poster

In Bruce’s opinion, finance takes money out of the real world. Take for example, the recent financial crisis, which came to being because there was too much money being exchanged by financial institutions and too little being actually invested in production. Bruce argued that although many of us believe that the financial crisis was caused by people taking too many risks, in reality the financial crisis was caused by an obsession with money’s value and using it safely. During the crisis, banks were growing faster than the economy but we didn’t pay attention to this because we believed that as long as we have a lot of money, we are safe. However as Bruce argued, if money is safe, it has no value as it is a “social good”- its value and purpose is social and therefore it is only useful when it’s being used. Money produces value through the activity it generates. One therefore has to take risks and invest in what one wants to happen despite not being certain that the value will be returned. In particular, Bruce believes that we need markets that encourage the use of money that aligns with our aims and values as a society- not just as individuals.

social life of money


Bruce got the idea of peer-to-peer lending from Ancient Athens, which had a perfectly functioning economy without any bank intervention like we see today. How was this possible? Well, Ancient Athens’ economy was based on a simple lending and borrowing model where a citizen borrowed to another citizen without interest and to a foreigner with interest.. One was sent to court if one didn’t follow these rules. With a group of friends, Bruce took this 2500 year old idea and launched it into the world in the form of Zupa, which is today UK’s largest peer-to-peer lending service.

He concluded by suggesting that a solution to the money problem could be alternative finance, which would be a a new way of thinking about money. Alternative finance stipulates that one should not treat money as being invisible or neutral.  Money should be used for the benefit of all – economically, socially, and environmentally. This doesn’t mean that we should put an end to banks but that we should actively engage in the world of investment. We need to take risks and put more money into the things that we want to see happen. The age of the universal bank is behind us and ahead is the opportunity of creating a truly diverse and resilient financial system which works for the good of society and not solely for the enrichment of a few.