“Modern business-people and lawyers are, in fact, powerful sorcerers. The principle difference between them and tribal shamans is that modern lawyers tell far stranger tales.” – Yuval Noah Harari (history professor)

In Sapiens: A Brief History of Humakind, Yuval Harari explains how Homo sapiens managed to build empires that require the cooperation of millions of people. He argues that the uniquely human ability to imagine things that do not exist is the secret to our dominance.

Common myths that exist only in the minds of people’s collective imagination allow for widespread cooperation. Widespread cooperation in turn allows humans to build empires. Interestingly, the social dynamics between 10 humans and 10 apes are not that different. But, place 100 apes into an office tower and there would be chaos. Put 100 humans into an office tower and we have order.

Harari refers to corporations to illustrate the power of collective myths. Corporations are a legal fiction. They can’t be touched. They exist only in our minds, yet they can open bank accounts, pay taxes, sue, and be sued.

Homo sapiens lived for untold millennia without [corporations]. During most of recorded history property could be owned only by flesh-and-blood humans… [Arman Peugeot created Peugeot the company] in much the same way that priests and sorcerers have created gods and demons in history… According to French legislators, if a certified lawyer followed 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 locus – a new company was incorporated.

Telling effective stories is not easy. The difficulty lies not in telling the story, but in convincing everyone 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 corporations? 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 image 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.

Fact may be stranger than fiction sometimes. But, fiction is more powerful than fact.