Юваль Ной Харари - Sapiens - A Brief History of Humankind

Peugeot is a figment of our collective imagination. Lawyers call this a ‘legal fiction’. It can’t be pointed at; it is not a physical object. But it exists as a legal entity. Just like you or me, it is bound by the laws of the countries in which it operates. It can open a bank account and own property. It pays taxes, and it can be sued and even prosecuted separately from any of the people who own or work for it.

Peugeot belongs to a particular genre of legal fictions called ‘limited liability companies’. The idea behind such companies is among humanity’s most ingenious inventions. Homo sapiens lived for untold millennia without them. During most of recorded history property could be owned only by flesh-and-blood humans, the kind that stood on two legs and had big brains. If in thirteenth-century France Jean set up a wagon-manufacturing workshop, he himself was the business. If a wagon he’d made broke down a week after purchase, the disgruntled buyer would have sued Jean personally. If Jean had borrowed 1,000 gold coins to set up his workshop and the business failed, he would have had to repay the loan by selling his private property – his house, his cow, his land. He might even have had to sell his children into servitude. If he couldn’t cover the debt, he could be thrown in prison by the state or enslaved by his creditors. He was fully liable, without limit, for all obligations incurred by his workshop.

If you had lived back then, you would probably have thought twice before you opened an enterprise of your own. And indeed this legal situation discouraged entrepreneurship. People were afraid to start new businesses and take economic risks. It hardly seemed worth taking the chance that their families could end up utterly destitute.

This is why people began collectively to imagine the existence of limited liability companies. Such companies were legally independent of the people who set them up, or invested money in them, or managed them. Over the last few centuries such companies have become the main players in the economic arena, and we have grown so used to them that we forget they exist only in our imagination. In the US, the technical term for a limited liability company is a ‘corporation’, which is ironic, because the term derives from ‘ corpus ’ (‘body’ in Latin) – the one thing these corporations lack. Despite their having no real bodies, the American legal system treats corporations as legal persons, as if they were flesh-and-blood human beings.

And so did the French legal system back in 1896, when Armand Peugeot, who had inherited from his parents a metalworking shop that produced springs, saws and bicycles, decided to go into the automobile business. To that end, he set up a limited liability company. He named the company after himself, but it was independent of him. If one of the cars broke down, the buyer could sue Peugeot, but not Armand Peugeot. If the company borrowed millions of francs and then went bust, Armand Peugeot did not owe its creditors a single franc. The loan, after all, had been given to Peugeot, the company, not to Armand Peugeot, the Homo sapiens . Armand Peugeot died in 1915. Peugeot, the company, is still alive and well.

How exactly did Armand Peugeot, the man, create Peugeot, the company? In much the same way that priests and sorcerers have created gods and demons throughout history, and in which thousands of French curés were still creating Christ’s body every Sunday in the parish churches. It all revolved around telling stories, and convincing people to believe them. In the case of the French curés , the crucial story was that of Christ’s life and death as told by the Catholic Church. According to this story, if a Catholic priest dressed in his sacred garments solemnly said the right words at the right moment, mundane bread and wine turned into God’s flesh and blood. The priest exclaimed ‘ Hoc est corpus meum! ’ (Latin for ‘This is my body!’) and hocus pocus – the bread turned into Christ’s flesh. Seeing that the priest had properly and assiduously observed all the procedures, millions of devout French Catholics behaved as if God really existed in the consecrated bread and wine.

In the case of Peugeot SA the crucial story was the French legal code, as written by the French parliament. According to the French legislators, if a certified lawyer followed all the proper liturgy and rituals, wrote all the required spells and oaths on a wonderfully decorated piece of paper, and affixed his ornate signature to the bottom of the document, then hocus pocus – a new company was incorporated. When in 1896 Armand Peugeot wanted to create his company, he paid a lawyer to go through all these sacred procedures. Once the lawyer had performed all the right rituals and pronounced all the necessary spells and oaths, millions of upright French citizens behaved as if the Peugeot company really existed.

Telling effective stories is not easy. The difficulty lies not in telling the story, but in convincing everyone else to believe it. Much of history revolves around this question: how does one convince millions of people to believe particular stories about gods, or nations, or limited liability companies? Yet when it succeeds, it gives Sapiens immense power, because it enables millions of strangers to cooperate and work towards common goals. Just try to imagine how difficult it would have been to create states, or churches, or legal systems if we could speak only about things that really exist, such as rivers, trees and lions.

Over the years, people have woven an incredibly complex network of stories. Within this network, fictions such as Peugeot not only exist, but also accumulate immense power. The kinds of things that people create through this network of stories are known in academic circles as ‘fictions’, ‘social constructs’, or ‘imagined realities’. An imagined reality is not a lie. I lie when I say that there is a lion near the river when I know perfectly well that there is no lion there. There is nothing special about lies. Green monkeys and chimpanzees can lie. A green monkey, for example, has been observed calling ‘Careful! A lion!’ when there was no lion around. This alarm conveniently frightened away a fellow monkey who had just found a banana, leaving the liar all alone to steal the prize for itself.

Unlike lying, an imagined reality is something that everyone believes in, and as long as this communal belief persists, the imagined reality exerts force in the world. The sculptor from the Stadel Cave may sincerely have believed in the existence of the lion-man guardian spirit. Some sorcerers are charlatans, but most sincerely believe in the existence of gods and demons. Most millionaires sincerely believe in the existence of money and limited liability companies. Most human-rights activists sincerely believe in the existence of human rights. No one was lying when, in 2011, the UN demanded that the Libyan government respect the human rights of its citizens, even though the UN, Libya and human rights are all figments of our fertile imaginations.

Ever since the Cognitive Revolution, Sapiens has thus been living in a dual reality. On the one hand, the objective reality of rivers, trees and lions; and on the other hand, the imagined reality of gods, nations and corporations. As time went by, the imagined reality became ever more powerful, so that today the very survival of rivers, trees and lions depends on the grace of imagined entities such as gods, nations and corporations.

The ability to create an imagined reality out of words enabled large numbers of strangers to cooperate effectively. But it also did something more. Since large-scale human cooperation is based on myths, the way people cooperate can be altered by changing the myths – by telling different stories. Under the right circumstances myths can change rapidly. In 1789 the French population switched almost overnight from believing in the myth of the divine right of kings to believing in the myth of the sovereignty of the people. Consequently,ever since the Cognitive Revolution Homo sapiens has been able to revise its behaviour rapidly in accordance with changing needs. This opened a fast lane of cultural evolution, bypassing the traffic jams of genetic evolution. Speeding down this fast lane, Homo sapiens soon far outstripped all other human and animal species in its ability to cooperate.