Occasional paper: Fungal banking

by Doug Muir on June 20, 2024

So in the last couple of decades we’ve discovered that many plants rely on networks of soil fungi to bring them critical trace nutrients. This is a symbiotic relationship: the fungal network can access these nutrients much better than plants can, and in return the plants provide the fungus with other stuff — particularly energy, in the form of glucose sugar, made from photosynthesis.

It turns out this relationship is particularly important for large, long-lived trees. That’s because trees spend years as seedlings, struggling in the shade of their bigger relatives. If they’re going to survive, they’ll need help.

The fungal network gives them that help. The fungus not only provides micronutrients, it actually can pump glucose into young seedlings, compensating for the sunlight that they can’t yet reach. This is no small thing, because the fungus can’t produce glucose for itself! Normally it trades nutrients to trees and takes glucose from them in repayment. So it’s reaching into its own stored reserves to keep the baby seedling alive.

Gosh that’s beautiful isn’t Nature great! Well… yes and no.

Because the fungus isn’t doing this selflessly. The nutrients and glucose aren’t a gift. They’re a loan, and the fungus expects to be repaid.

After a certain number of years, if the seedling doesn’t start producing glucose? The fungus cuts it off. No glucose, no nutrients, nothing.  The seedling then dies and falls to the forest floor and rots, and the fungal network gets at least some of its loaned material back.

— Let’s pause here for an obvious question: how does a brainless fungus make a loan?

Well… fungi don’t have brains, true. They don’t even have nerves. But fungi have networks — really, they *are* networks. If you look at a mushroom, you’re only seeing the “fruiting body” of a much bigger organism, 95% of which is underground. The real fungus is a complex web of slender strands that may reach tens or even hundreds of meters away.

Mushroom grown in a petri bowl on agar. We normally only see the fruit of  the mushroom and not the actual essential ”body” part :  r/Damnthatsinteresting

We know that fungi can send chemical signals across this network, and we know that the network can grow and change in response to those signals. And we know that a big network following a few simple rules can result in surprising emergent behaviors. (Kind of like, you know… a market.) So, at least some fungi can do some sort of basic information processing. At least some fungi have /behavior/.

So, coming back to the particular behavior in question: does this sound familiar? The fungus makes loans out of its stored capital. and if the loan isn’t repaid on time, it forecloses.

Yes: the fungus is acting like a banker: A mindless fungal network invented capitalism tens of millions of years ago.

And it underpins all the great forests of the world!

Understanding the basics of ecological succession – Eco-intelligent™

For centuries, people noticed that forests tended to expand at their edges.  Let farmland lie fallow for a few years, and first weeds would take over; then shrubs and bushes; then trees, and then bigger trees.  It might take a century or more, but field would turn to forest.  This became known as “ecological succession”.  A bunch of empirical rules were derived by observation: given this sort of soil and this much rainfall, you’d see this group of plants first, and then twenty years later this other group, and so forth.

The problem was, succession leading to forest was a bunch of observations with a big theoretical hole in the center.  Imagine a mid-succession field full of tall grass and bushes and mid-sized shrubs.  Okay, so… how does the seedling of a slow-growing tree species break in?  It should be overshadowed by the shrubs and bushes, and die before it ever has a chance to grow above them.

And the answer is, the fungus.  The forest uses the fungus to pump sugar and nutrients into those seedlings, allowing them to grow until they are overshadowing the tall grasses and shrubs, not vice versa.  The fungus is a tool the forest uses to expand.  Or — looked at another way — the fungus is a venture capitalist, extending startup loans so that its client base can penetrate a new market.

This also answered a bunch of other questions that have puzzled observers for generations.  Like, it’s long been known that certain trees are “nurse trees”, with unusual numbers of seedlings and saplings growing closely nearby.  Turns out: it’s the fungus.  Why some trees do this and not others is unclear, but the ones that do, are using the fungus.  Or: there’s a species of lily that likes to grow near maple trees.  Turns out they’re getting some energy from the maple, through the fungus.  Are the lilies symbiotes, providing some unknown benefit to the maple tree?  Or are they parasites, who are somehow spoofing either the maple or the fungus?  Research is ongoing.

Oh, and the fungus may also force the trees to make changes to their lifestyle… for their own good.  “Mycorrhiza also induce changes in the emission of plant volatiles, making them more attractive to the natural enemies of herbivores, their predators [7], and parasitoids [8], thereby providing plants with additional protection.”  Like a bank requiring that you get insurance and install a security system.

Oh, and plants can send signals through the network — for instance, that one tree is under attack by beetle grubs.  Nearby trees may start diverting energy to produce grub-deterrent toxins, which they wouldn’t normally.  We already knew plants could do that sort of thing using airborne pheromones.  Turns out they can do it through the fungus, too.  Does the fungus “charge” for this service?  Or is it gratis, a public service, a fungal 911?  Research is ongoing.

But wait: there’s more!  There are different sorts of fungi, and they have different preferences as to what kinds of plants they team up with.  (Market partition, if you like.)  Some are specialists, some are generalists.  When there are a bunch of different sorts of fungal networks present, the forest tends to be more diverse and more productive.  Competition is good, right?

Not necessarily.  An individual fungus doesn’t want to be competing.  It wants to be the monopolist, the sole provider.  So, there’s evidence that the networks push their favored species to grow higher and faster, so that they can overshadow the species the fungus doesn’t “like”.  The result may be a forest that is less diverse and productive, but that’s not the fungus’s problem.

This is one of those quietly expanding frontiers, with a steady drumbeat of new papers coming out every year.  How far can signals travel?  What other information might be carried?  How long does a fungal network “remember”?  Just how deep does the rabbit hole go?  (And, of course… is there any way to hack this for human advantage and profit?)

Depending on your point of view, you could say this all shows that banks and finance — in the very broadest sense — are not only natural but hardwired into life; something very similar has been going on, silently but profoundly, for millions of years, and it has shaped the world around us.  Or, you could say this all shows that banks and financiers could be replaced by a sufficiently large fungus.

Anyway.  The next time you take a walk in the woods… yes, the trees really are talking: that’s not poetry or a metaphor.  It’s just, a lot of that conversation probably consists of haggling with their fungal partners.  

{ 15 comments… read them below or add one }


oldster 06.20.24 at 8:31 pm

Thanks, Doug! These little vignettes of current science are great fun, and you have a knack for engaging exposition. (I’m assuming that what you say is at least broadly true and gives a fair picture of the current state of research.)

The incredible growth in our understanding of the world — whether about novae, fungi, or interstellar probes — makes me hope that the human race can get past our current suicidal follies and make it to the next period of relative tranquility.

Renewed flirtations with autocracy; blindness about global warming; racism and tribalism of all kinds; imperialistic conquest of neighbors; oligarchic employment of technology to enslave and impoverish the masses; resurgent misogyny and oppression of women — all of these things are depressing and make one doubt the value of the human experiment. But the growth of science gives me hope.

Thanks for writing stuff that does not make me want to die.


Adam Hammond 06.20.24 at 9:35 pm

Earthworms are ecological engineers, especially impacting mycorrhiza. Imagine the impact that the human-introduced waves of earthworm species has caused in North America! We started ringing the ecological bell long before we had the slightest clue.


Alan White 06.21.24 at 5:31 am

I’m copying this URL to a colleague who is an expert in fungi. She’ll be delighted!

I wonder if you Doug have watched Star Trek Discovery, where fungi form the basis for a form of warp drive that is instantaneous transport: spore drive. Widespread fungus indeed!


Polly Ene 06.21.24 at 7:00 am

My takeaway: don’t let bankers in my house.


Gareth Richard Samuel Wilson 06.21.24 at 7:06 am

“Depending on your point of view, you could say this all shows that banks and finance — in the very broadest sense — are not only natural but hardwired into life; something very similar has been going on, silently but profoundly, for millions of years, and it has shaped the world around us.”
That reminds me of Heinlein’s The Puppet Masters, where even after an entire city has been taken over by mind-controlling parasites, parasitised businessmen still have to go to parasitised bankers to get business loans.


Trader Joe 06.21.24 at 10:38 am

” how does a brainless fungus make a loan?”

After 30 years on Wall Street I’ve seen hundreds of brainless fungi make loans and I always thought it had more to do with ethanol, cocaine or sheer stupidity…..who knew all this was involved (smile).

Thank you for this piece and the others like it. I never fail to learn something new.


Jeff 06.21.24 at 11:53 am

And this is why I keep coming back to this site! Beautiful piece, and thank you.


William Roark 06.21.24 at 2:00 pm


As I read this, I was reminded of a radio program on the subject of fungi–from BBC Radio 4’s In Our Time, hosted by Melvin Bragg (Feb. 15, 2018) I recall listening to (and downloading) Excellent show–but nothing of what you present here was brought up.

The lefty, anti-capitalist in me would be curious as to how this natural world of “banking” fundamentally differs from the human social world of banking. Channeling my inner David Harvey, one contrast may be that in our social world practice, we pursue this with the expectation of endless accumulation as premised on infinite growth upon a finite planet–and as that is premised on ever-expanding debt financing (Just listened to one of Harvey’s broadcasts: Anti-Capitalist Chronicles: The Question of Debt in our Lives) and combined with seeming environmental degradation.

I would assume nature does not operate on those assumptions (is there an equivalent of the natural “Jubilee Year” where slates are wiped clean?). Plus, we might benefit from a reminder of the naturalistic fallacy so we don’t relapse into the fundamentalism of the late 19th century when Darwin’s theory of evolution was grafted onto the rapacious capitalism of the Gilded Age in the form of Social Darwinism.


engels 06.21.24 at 2:39 pm

Root rot, which kills house plants when they’re over-watered, is fungal too: that seems more similar to the financial sector today.


Doug Muir 06.21.24 at 3:55 pm

oldster @1 asks, “I’m assuming that what you say is at least broadly true and gives a fair picture of the current state of research.”

I am not an expert! But I try to do my homework, and I won’t write about something until I think I have a reasonable understanding of it. I do try to include links to relevant papers, so you can check my work.

William Roark @8 asks “The lefty, anti-capitalist in me would be curious as to how this natural world of “banking” fundamentally differs from the human social world of banking.” (and also worries about the naturalistic fallacy)

Okay so on one hand the idea that the fungal network is “capitalist” is not original to me — google around and you’ll see various papers alluding to this as a metaphor. That said, I am being somewhat tongue-in-cheek here. And, really, you could rearrange these facts to tell a more lefty, socialist kind of story: the trees in the forest cooperating, pooling their resources to achieve common goals. I didn’t mention it in the article (it was getting long enough already), but there’s evidence that trees may use the network for something that looks like altruism — as in, trees may divert resources to support trees that are injured or sick. So it’s not all tooth-and-claw.

As to the naturalistic fallacy… well, there’s a lot of nonsense out there about wolves and apes, but I haven’t seen anyone yet claiming a fungus for emulation. “Yes, nature says that we should follow the model of this pallid, clammy organism that feeds off dead things”. I like fungi myself, but somehow I don’t think it’s going to catch on.

Doug M.


KT2 06.22.24 at 4:55 am


“Or, you could say this all shows that banks and financiers could be [ by a sufficiently large fungus.” … “… as the environments in which fungi live grow warmer, they will adapt, eventually reaching a point where they will find the human body a reasonable place to live.”
Scientists find further evidence that climate change could make fungi more dangerous

What to call a banker taken over by fungi?

Unfortunately a chimeric Fombie will still be roaming even after an apocalypse. Because…

Fungi possess a trick we humans are unlikely to evolve, which I am hugely impressed with, and which Elon and Bill would consider handing over their entire wealth – only when they know the asteroid is on collision course – which ironically fungi Fombies won’t know about;
“The lack of K-T extinction in fungal evolution is also supported by molecular data, because phylogenetic comparative analyses of a tree consist of 5,284 mushroom species (Agaricomycetes) didn’t show signal for a mass extinction event around the Cretaceous-Tertiary boundary.[39]”
wikipedia Evolution_of_fungi


OneDimMan 06.22.24 at 1:25 pm

When I pull the plug in my bathtub, the other end of the tub “sends” water to the end that is draining. Is this communication? Is it altruism? An investment?

I was very happy to read and learn from the article. The metaphors almost certainly helped me read it. Thank you for the research and the care in writing. But, really: “the fungus expects to be repaid”?


bad Jim 06.23.24 at 5:21 am

Possibly relevant to KT2’s point is Cells can go from wide awake to fast asleep in an instant. “… dormancy is a survival strategy for global catastrophes”


Janis 06.25.24 at 4:22 pm

I’ve been at odds a long time with Adam Smith. Yes, our beastly nature has capitalism built in, and it’s worked for crude propagation. We aren’t fungi, or trees. We have this fancy little knob on the top of us that’s supposed to have a function.

Those seeding trees are mothers, something fringe capitalist literature is only now addressing. Spore drive, indeed.


KT2 06.29.24 at 2:18 am

Earthly dark matter. Dark fungi.
Not banks, big gaia pharma; “organ-rejection treatment cyclosporine are derived from fungi” (1.)
Or just us as blind freddy. 850,000 yet to classify!
I think we need to stop anthropomorphisng and start classifying.

“Out of Sight, ‘Dark Fungi’ Run the World from the Shadows
“The land, water and air around us are chock-full of DNA from fungi that scientists can’t identify

“Nevertheless, when pressed for possible benefits, Nilsson has no trouble obliging. The unexplored edges of fungal biology could, for example, yield valuable chemicals or medicines (penicillin and the organ-rejection treatment cyclosporine are derived from fungi, to name just a couple). “One or more of these species will prove super important to humans,” he says.

“Most crucially, dark fungi are essential to the proper functioning of the biosphere. They’re thoroughly entwined with the rest of nature. To preserve them and all the intricate, life-supporting processes they underlie, researchers have to keep pinning them down one by one.”…

Calling citizen biologists…
“Top 50 most wanted fungi

“… UNITE database for molecular identification of fungi, such that the underlying sequences and fungal lineages are open to third-party annotation. We invite researchers to examine these enigmatic fungal lineages in the hope that their taxonomic resolution will not have to wait another ten years or more.”

“rDNA ITS based identification of Eukaryotes and their communication via DOIs
Nilsson et al. 2016. Top 50 most wanted fungi.MycoKeys, 12: 29-40.

And do NOT read the side effects of cyclosporine!
“Thomas Starzl’s 1992 memoir explains through the eyes of a transplant surgeon that ciclosporin was an epoch-making drug for solid organ allotransplantation.[64] It greatly expanded the clinical applicability of such transplantation by substantially advancing the antirejection pharmacotherapy component.[64] Put simply, the biggest limits of applying such transplantation more widely were not cost or surgical skill (as formidable as those are) but rather the problem of allograft rejection and the scarcity of donor organs. Ciclopsporin was a major advancement against the rejection part of the challenge.[64]”

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