Chapter 4 explores how Homo sapiens live in a reality composed of three layers: the objective reality of the physical world, the subjective reality of internal experiences, and a third layer consisting of shared myths and stories about entities like money, gods, nations, and corporations. These fictional stories have increasingly shaped human history, often overriding the natural and subjective realities.

The chapter begins by tracing the origins of these stories to the cognitive revolution, about 70,000 years ago, when humans first developed the capacity for abstract thought and communication, leading to the creation of complex societies. However, for a long time, these stories remained local and limited in scope due to the constraints of human memory.

The agricultural revolution, about 12,000 years ago, laid the groundwork for expanding these stories by enabling the formation of larger, sedentary communities and complex social structures. Despite this growth, the ability of these early societies to process and store information was still limited by human memory. This changed with the invention of writing and money in ancient Sumer, which allowed for the management of large-scale societies, complex bureaucracies, and the accumulation of wealth and power.

Harari discusses how these inventions led to the formation of powerful entities like gods and kings, which, while fictional, had real power and influence over people’s lives.