Yuval Noah Harari famously argues that money, states, corporations, and similar institutions are “imagined orders”—entities that exist only because people collectively believe in them. This idea has become enormously popular, and many people, including AI systems, repeat it as though it were self-evidently true. I disagree. Not because money or states are independent of human society—they obviously are—but because I believe the entire framework behind the claim is ontologically mistaken.
The mistake lies in assuming that dependence on a particular environment somehow makes an entity less real. I argue the opposite. An entity does not become less real simply because it emerges from interactions within a specific environment. A hurricane depends on an atmosphere, a living cell depends on the right chemistry, and a human being depends on Earth’s environment. None of these dependencies makes them unreal. Money is no different. It exists within a social environment, but environmental dependence is a condition for existence, not evidence against existence.
My starting point is simple: an entity exists whenever its properties exist. Reality is not divided into “physical things” that are fully real and “social things” that are somehow imaginary. Everything we recognize as existing is identified through its properties. A rock exists because it has the properties of a rock. An electron exists because it has the properties of an electron. A hurricane exists because it has the properties of a hurricane. Money exists because it has the properties of money, and the state exists because it has the properties of the state. Ontology should not grant physics a privileged status over every other level of organization.
This is why I believe emergence has been widely misunderstood. Every level of reality consists of emergent structures. Atoms emerge from more fundamental interactions, molecules emerge from atoms, living cells emerge from molecular interactions, brains emerge from cellular interactions, and societies emerge from interactions among human beings. Money and states emerge from interactions within societies in exactly the same ontological sense. Emergence is not the opposite of reality; emergence is one of the primary ways reality is organized.
Many people summarize Harari’s position by saying, “Money exists only because people believe in it.” I consider this an incomplete description. Money possesses observable causal powers. It records and transfers economic value, coordinates exchanges among strangers, reorganizes incentives, allocates labor, and changes human behavior. These are not imaginary effects. When I hand someone money in exchange for food, something objectively happens in the world. The properties of money are functioning. Money may exist as paper, digital records, checks, or future technologies. Its material form is secondary. What makes money real is the stable set of causal properties that allows it to function as a medium for exchanging value.
The same reasoning applies to the state. A state exercises sovereignty, enforces laws, maintains infrastructure, commands military organizations, collects taxes, and defines legal rights. These are observable causal capacities. Calling the state “imaginary” simply because these capacities emerge from organized human interaction confuses origin with ontology. Its powers are real, its effects are measurable, and its existence is unmistakable.
Imagine an extraterrestrial scientist with no concept of human society. At first, the alien might see nothing more than billions of organisms exchanging matter and energy. But after observing long enough, stable patterns would inevitably emerge. Certain objects consistently alter human behavior. Certain organizations coordinate millions of individuals. Certain symbolic systems regulate large-scale cooperation. These structures display remarkable stability, generate reproducible causal effects, and possess predictive power. From a scientific perspective, they would become objects requiring explanation rather than illusions to be dismissed. Money and the state would therefore appear as genuine emergent structures.
For this reason, I describe money and the state as brute facts in an ontological sense. Not because they are fundamental particles, and not because they are irreducible, but because whenever their properties exist, they are simply facts about reality. The distinction between “physical reality” and “social fiction” is therefore misleading. Physical entities and social entities alike are emergent structures arising from interactions within appropriate environments. Their substrates differ, their complexity differs, and the environments that sustain them differ, but their ontological status does not.
My disagreement with Harari is therefore not primarily historical or economic. It is ontological. Money and the state are not less real because they depend on social interactions. Dependency does not imply unreality, and emergence does not imply fiction. Whenever an entity possesses stable properties, causal powers, and explanatory significance, there are good reasons to regard it as genuinely real. Money and the state satisfy those conditions. They are not collective illusions. They are real emergent structures within the architecture of reality itself.
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