The frame around money that makes most sense to me is that the economy is a system of promises. It's not a system of things, it's a system of promises about those things. Money is valuable because we collectively believe that you can cash it in for actually valuable things, such as food, housing, comforts, and many other things, at will. It's a promise that you have a reserve of valuable things if you decide to use it.
Societal problems arise when those promises are broken. For instance, financial crises happen when too many of those promises become broken all at once, in contact with Reality. Large amounts of people thought that their house was valuable and that their value kept going up, a promise which was implicit, and reflected in the current state and the tendencies of the market, and it turns out that they weren't so valuable after all, meaning that many aspects of our society become disrupted all at once.
Our society requires some form of stability and predictability to operate, and money is one way to quantify and systematize that. People wouldn't build a business if they thought that other people could simply rob them of their profits and steal what they made, which is of course why we have a law system, which is another system of promises, that links up with our economy.
Another form of promise takes the form of interest rates, which stem from the fundamental idea of the time value of money: one unit of money right now is worth more than one unit of money in the future, and this value decreases the longer it takes for that one unit to be paid in the future. Thus, interest rates are a promise to compensate people for giving their money, in hopes of being rewarded later, but of course, nothing in society is guaranteed.
There are tons of other promises in the economy of course, besides money, assets and what people hope to get from them in the future (by keeping them or selling them), and interest rates. Financial products are likewise promises, such as insurance, bonds, stocks, derivatives, etc. Stocks are notable because the promise here is not at all guaranteed in the future. Whereas fixed income securities such as bonds give out a guaranteed payment, with guaranteed interest rates, meaning that they are the most explicit forms of promises, the returns on stocks aren't guaranteed at all, because the performance of the related company isn't either.
Uncertainty is inevitable in our world. Reality is far too complex for us to model exactly, and even the reality of human systems and how they interact with one another isn't predictable to us. We live in a complex system, not a complicated system. This is why people who hand out promises are reluctant to give conditions which are set in stone. Your mortgage might see some revisions along the line if the state of the economy significantly changes, and the same thing is true for your pension, your income, and your contracts, if you deal with those.
The promise theory of the economy also explains very easily why money can be made into existence, just at will. When you view money as a token to be traded for other things, it's difficult to understand how money can simply be made out of existence, because real goods and services haven't been made in proportion to that new money. Promises can be made into existence, when someone promises to pay someone back (usually a bank) in the future, for having access to money right now. The exchange happens immediately, because there is a promise for future compensation in exchange of immediate money to be spent, which is why loans literally create money out of thin air.
Beliefs are never neutral. The mind is effective precisely because it can ignore certain parts of Reality in favor of others. Such a selective ignorance is never neutral however, and always comes with various assumptions. The map that you use to navigate your way through the forest is useful precisely because it ignores the flora around you, but your path might be blocked by a tree that fell down after a storm. And such a map is only useful for us humans, a squirrel living in the forest cares a lot more about the specific details of the neighboring trees than about the general topology of the entire forest.
What are the assumptions that we can see in the economy then? This is not an exhaustive list because I am no economist, but I can list some of the main ones that I see here. Because the economy is a human system, it is not really possible to distinguish between the fundamental assumptions of the system "in and of itself", and between what people (economists and regular people) think.
§1. Interest rates are positive, therefore the economy needs to keep growing. All of the loans that have been given so far were made with the assumption that money has to be paid back in greater quantity than was loaned, and is reflected by how high or low the interest rates. Interest rates are always positive however, except in some very strange cases that have rarely happened, which means that one of the fundamental assumption of the network of promises is that the economy needs to keep growing, all the time.
This is of course absurd. Perpetual growth on a finite planet is the folly of man, and will be the doom of civilization. Right now we are utterly reliant on fossil fuels for the vast majority of our energy, close to three quarters of it at a global scale, and those resources are by definition non-renewable (at our timescale at least, over hundreds of millions of years they might be replenished). Our civilization cannot grow forever, but our system of promises is built on the assumption that we can. Hence, financial crises are inevitable for the future to come, because you cannot ignore Reality forever.
The reason why we live in an 'energy blind' society is because there is no reason for us to take the constraints of fossil fuels into account, the same way that there is no reason why a spoiled child would be frugal with the money, because they are born into such wealth that they can spend however they want, without thinking of the consequences. The incentives of everyone is to become as rich as they can in the short-term, and this especially effects companies, because they are in competition with one another over scarce resources and scarce clients.
§2. There is a general belief that uncertainty can be modelled fairly accurately, such that we can build financial models that can make good predictions about the future. This is incredibly naive however, because economists by and large can never predict financial crises, the black swan events as Nassim Taleb describes them. The counter to that is that those events are exceptional, and that no one could predict them, but Taleb's point is that society is defined by those exceptional events.
People's beliefs about the future are shaped by the crises that they went through. The economy is shaped by how much trust people have in governments, institutions, companies, and the general direction of society. It is thus impossible to decouple serious economics from psychology, because even fiat money itself is only valuable because people believe it is.
The common view of uncertainty confuses between two forms of it: there is quantifiable risk, and Knightian uncertainty. Risk is when a system is fixed to the point that you can know everything that can happen in it, but you just aren't sure what the probabilities are for each scenario. But because the environment is fixed, you can collect data, and progressively arrive at better and better approximations of the real, underlying distributions.
Knightian uncertainty on the other hand is when the space of possibilities is not even known, such that you cannot even measure anything about it, because you know nothing about those odd scenarios. It is the realm of unknown unknowns, which you can never rule out by their very own nature. You cannot even say that they can't happen, because you don't even know what they are.
One way to phrase Taleb's ideas from the Black Swan, is that people use hindsight to convert uncertainty into risk, and pretend that our models of Reality can now take into account uncertainty, when they really can't. It's only in hindsight that the subprime mortgage crisis was obvious, and people realized that housing couldn't be assumed to be a safe investment all of the time, because such an assumption could be abused with subsequent promises (subprime mortgages). Which leads me to the idea of diversification.
§3. A general trend of the past 100 years or so is that localized risks created a great deal of problems, because they resulted in cascades of broken promises, such as in the case of the bank runs that occurred during the Great Depression of 1929, and those problems were 'solved' through acts of consolidation: instead of banks acting independently from one another, with the risk of the cascades I just mentioned above, there would now be regulators and central banks that monitor the situation of the local banks, such that problems could be detected early on and addressed, before cascades of problems would occur in one part of the country, and spread to one another. A similar act of consolidation happened after the 2008 subprime crisis, which led to various regulatory standards such as Basel III, to ensure that banks hold more capital reserves, amongst many other things.
It seems that this strategy of consolidation has been good so far, but we should be careful about extrapolating the successes of the past to the future. After all, those reforms were only done after catastrophic failures in the economy happened, which means that they can only be reactive to the problems that happened in our world.
But while consolidation decreases local risk, it also makes everything more interdependent, meaning that the crises that happen in the blind spots of the current set of regulations will be even worse, because they affect more and more of society.
Systems where the parts are less dependent on one another are more resilient in the face of problems, which is why technology, when it is made with the intent of actually being good, 1 is made as modular as possible. You don't need to change your computer if your mouse stops working, or if one of the keys of your keyboard is no longer responsive. There is a decoupling of parts, meaning that the system can be kept intact, while one of the part is being swapped out.
But our system as a whole has become far more dependent over the past decades. Our supply chains now involve all of the major continents in the world. Our energy base is affected by geopolitical conflicts that happen across the planet. Insurance companies remain solvent based on the performance of the companies that they invest in, and those companies see their stocks rise based on what people want to believe will be valuable in the future. Everything has become part of an inextricable network of promises, assumptions, narratives, dependences, regulations, and overall complexity.
While the move of consolidation smooths out the local and volatile problems that smaller actors inevitably face, it does nothing whatsoever about our global exposure to risk and uncertainty. Who knows what will be the impacts of the next financial crash (it is incredibly naive to think that there won't be a next one). But it is unlikely to remain localized, due to the interdependent nature of our current system.
Thus, while regulators look at the past as a series of unforeseen disasters, which were cleverly addressed by their set of regulations, until we might (hopefully) converge onto a set of standards that ensure that none of those happen again, the nature of uncertainty (black swans and unknown unknowns, not quantifiable risk) tells us that when (not if) the next shock to the economy arrives, it will be far worse and widespread than the problems that came before, precisely because those regulations made the system more interdependent.
In the quest of eradicating the small crises, we are unintentionally building a giant looming crisis that will affect everyone, the same way that extinguishing small, localized forest fires ends up creating a dense, dry forest, where a single fire spreads through the entire forest, and destroys it completely.
It's impossible to talk about everything related to the economy, and all of its adjacent systems, because modern society as a whole has become so complex that no one can understand it fully.
However I hope that the lens on 'promises' can shed some light about important aspects of our society, and the deep causes of societal problems. It is foolish to think that we can separate 'money' from 'belief' and 'narrative'. All of those are part of the same game, which is why economists can never be like physicists—unbiased observers of fundamental principles—because they themselves are actors in the game of narratives, a game which is never neutral, because narratives dictate what we consider to be real, important, valuable.
That lens is, as with every frame, limited of course. I focused here on a more 'sociological' and temporal angle of money, how promises start and how they change over time, but in the past, I also wrote about the ineffable and how money systematically betrays it, because one of the great lies of money is of course that it can give people what they truly want, which is simply false.
Right now, we are witnessing the unravelling of the most complex system that mankind has ever devised. It's not just that people are going to lose their money, their income, and perhaps even their home in the decades to come, it's the entire collective sense of reality that will be pulled out from under our feet. The promises of a great techno-utopian future is already something that many people are disillusioned by, but by and large, no matter how cynical people currently are, they still remain in the world of 'normality', and engage in the 'normal' activities of commuting, studying, working, taking loans, paying taxes, buying groceries at supermarkets, going on holidays, and much more.
Very little of that will remain when the system will experience real shocks. This will be disorienting, not just because people will lose a lot, and will have to live in very different ways, but because the mental infrastructure that people have inhabited for several decades now will crumble right in front of them, as the series of promises that they implicitly believed in will be left unfulfilled. It's not just that people won't have a pension, or won't have a car, or won't have any of the comforts of the modern world, it's that even having access to food will become a major, major problem in the decades to come.
This will be a bumpy ride, but whether we like it or not, that's Reality. The promise that we can ignore Reality forever, and go about 'worldbuilding' for our own purposes has come to an end, it's time to start participating in Reality, rather than tell ourselves that we can command it however we want it to.
1 Technology made with the primary intent of making money does the opposite: Apple devices are notorious for being difficult to take apart and repair, and it's of course done on purpose, because it drives demand higher and thus increases the revenue of the company.
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Economics Modernity Collapse Narrative Uncertainty Fragility Interdependence
2026-07-14