by David Wolman
Table of Contents
Also by David Wolman
Title Page
Introduction
CHAPTER 1 - The Missionary
CHAPTER 2 - The Messenger
CHAPTER 3 - The Counterfeiters
CHAPTER 4 - The Loyalists
CHAPTER 5 - The Patriot
CHAPTER 6 - The Traitor
CHAPTER 7 - The Revolutionaries
CHAPTER 8 - The Emissary
Acknowledgments
NOTES
BIBLIOGRAPHY
INDEX
Copyright Page
Also by David Wolman
A Left-Hand Turn Around the World Righting the Mother Tongue
INTRODUCTION
On Christmas Eve 2009, Umar Farouk Abdulmutallab began the journey he thought would take him from this world into the next, and into the awaiting embrace of six dozen virgins. He carried nothing more than a small duffle bag and, in his underwear, the ingredients for plastic explosives. If not for some fumbling on the part of the aspiring bomber and the reflexes of a few passengers and the crew, Northwest Airlines Flight 253 would have exploded somewhere over Watford, Ontario.
Eight days earlier, Farouk Abdulmutallab stood at an airport ticket counter in West Africa. With $2,381 in cash he purchased a one-way ticket from Lagos, Nigeria, to Detroit, connecting through Amsterdam.1 Pardon me for my ignorance about the inner workings of the global war on terror and airline ticketing procedures, and for a line of reasoning that promises to infuriate the ACLU, tax-evading militiamen, the U.S. Treasury, and the Russian mob, but I have to ask: in the post-9/11 age, who uses $2,381 in cash to buy a one-way ticket to the other side of the world besides crooks and terrorists? Think of all the mileage points lost!
Money is no object. Maybe so for a lucky few. Except, of course, money is an object—tearable, flammable, even wearable. It’s also an object of obsession, inquiry, aspiration, remorse, delight, disdain, curiosity, and just about every other sentiment imaginable. Money takes different forms, too: credit and debit cards, checks, money orders, lottery tickets, gift cards, Disney Dollars, ones and zeroes on distant servers, and, for the time being at least, rectangular slips of paper and round coins that economists call physical representations of sovereign currency, and that the rest of us call cash.
A few years ago, I started bumping into stories about the cost of manufacturing coins and maintaining them in the economy, and suggestions by some pundits that the United States go cold turkey on pennies. A scientist at MIT founded Citizens for Retiring the Penny, and for a few years the guy was everywhere: 60 Minutes, NPR, the New York Times, ABC World News Tonight, the Boston Globe, The Colbert Report. He had his talking points down pat, about time and materials wasted, potential benefits to the economy, and research showing that rounding prices up wouldn’t hurt consumers.
The debate made me realize that I have a bit of a soft spot for pennies, probably because of Bazooka chewing gum and a Bostonian named Bob. When my older brother and I would take the train home from school back in the early 1980s, we would often stop at a corner store called Bob’s Waban News. While Bob griped about the Red Sox and served coffee to his regulars at the bar, kids filtered in and out to order Slush Puppies or purchase Charleston Chew candy bars. And if we had any pennies, we’d take our shot at the box.
Above the register, just below where the wall met the ceiling, Bob had affixed a cardboard box, perhaps sixteen inches across. It had no top, and inside was a bell. If you lobbed a penny up and missed the box or—more demoralizing—your penny landed inside but failed to hit the hidden bell, you got nothing. If you hit the bell, you earned a piece of Bazooka bubble gum, not to mention glory. Ding! If we close the book on pennies, what would happen to this kind of game? What would people throw into wishing wells?
Yet nowadays, nobody seems to like coins except collectors, which may explain why those Coinstar machines standing post outside supermarkets process more coins than the U.S. Mint manufactures in a year. In the words of one anonymity-requesting economist I spoke with at the U.S. Treasury: “I hate coins. Why do we even have them?” One answer is that pennies honor Abraham Lincoln. But maybe the national holiday, a gigantic memorial, and his face on a banknote (purple fives!) are sufficient. Some might even say it’s an insult to the sixteenth president to put his image on unwanted coins that can’t buy anything.
Despite my nostalgia for Bob’s Waban News and those brick-like pieces of Bazooka gum, the logic expressed by retire-the-penny types resonated with me. I didn’t care that they had once been mocked on an episode of The West Wing, but I did think that to avoid sounding petty, they needed to amp up the bluster. I wrote an essay for Wired advocating not merely for the end of small change, but an end to physical money, period. And I didn’t hold back. “In an era when books, movies, music, and newsprint are transmuting from atoms to bits, money remains irritatingly analog,” I declared. “Physical currency is a bulky, germ-smeared, carbon-intensive, expensive medium of exchange. Let’s dump it.”
Reader responses were . . . passionate. “Wolman is a fascist.... Taking away cash would be like taking away our guns: One needs it most only after it’s gone.” Another read: “My cash is my business.” I was accused of shilling for secret lobbying groups, and of sacrificing “the last vestiges of privacy” so that “those bastions of clarity and honesty called banks and credit card companies can mine our every transaction.”
I had smacked a nerve. People are willing to kill for cash—we know that. But what I was hearing made me think that people might kill to keep it. That got me wondering: what is cash, anyway? The simple answer is little metal discs and strips of paper bedecked with dead white guys and cryptic messages that make Nicholas Cage go even more bug-eyed. But what is its place in our economy, our culture, and our minds? Could we ever do without it? Should we?
Although predictions about the end of cash are as old as credit cards, a number of developments are ganging up on paper and metal money like never before: mistrust of national currencies, novel payment tools, anxiety about government debt, the triumph of mobile phones, the rise of virtual and alternative currencies, environmental concerns, and a wave of evidence showing that physical money is most harmful to the billions of people who have so little of it.
This book is about the twilight of money in its most commonly understood form, and a search for the places, people, and ideas that provide a glimpse of what comes next. The individuals you’ll meet within these pages inhabit a vast spectrum of thinking about cash, its machinations, and its role in our lives. They are oracles to some, eccentrics to others. But all of them are visionaries merely for contemplating, and at times reimagining, something so fundamental, so uncontested. They just might convince you that a monetary revolution is afoot.
CHAPTER 1
The Missionary
Money doesn’t talk, it swears.
—BOB DYLAN
Marco Polo thought the Chinese were out of their minds. Paper money was born in China, perhaps as far back as AD 800. But it was during the Yuan Dynasty, beginning in the thirteenth century, when the sovereign first replaced coins with paper.1 When Marco Polo cast his eyes upon this monetary system some 100 years later, he was flabbergasted. The emperor’s mint “hath the secret of alchemy in perfection,” he wrote. Instead of circulating coins, the ruling authority passed out slips of paper stamped with a number—an amount corresponding to an equivalent handful of coins safeguarded in storage. It wasn’t real money in the way anyone had ever understood it. Yet somehow, it worked.
Adorned with marks and seals of officialdom, this special paper made from mulberry trees circulated freely, enriching the kingdom and turbo-boosting commerce. When people far and wide readily accept the same medium of ex
change, opportunities for trade expand exponentially. The emperor had mandated the notes’ pass-ability, while making them redeemable for coinage. Anytime you wanted to, you could turn in the paper for coins.
In the uneconomically titled chapter of Polo’s travelogue, “How the Great Kaan [Kublai Khan] causeth the bark of trees, made into something like paper, to pass for money over all his country,” he described the bizarre arrangement, this sleight of hand that somehow wasn’t. Yet the explorer knew full well that for his readers back in Europe, the explanation would likely fall short. “For, tell it how I might, you never would be satisfied that I was keeping within truth and reason!” I kid you not, Polo was saying. This paper money thing is out of this world.
The ingredients of strict enforcement—anyone refusing to accept the paper currency was given the death sentence—and redeem-ability were what made the system viable. To further reinforce faith in the banknotes and in the issuing authority, the text on the notes declared that they would be valid for all eternity. In a recent interview with the BBC, the governor of the Bank of England, Mervyn King, took a stab at explaining the meaning of “forever value.” Paper money, he said, is “an implicit contract between people and the decisions they believe will be made in the years and decades to come, about preserving the value of that money. It’s just a piece of paper. There’s nothing intrinsic in value to it.” Its value, he said, is determined by the perceived stability of the institutions behind it. If the public remains confident in those issuing institutions, people will regularly accept and use paper money. If that confidence breaks down, the currency, and economy, will collapse.
Nowadays, paper money printed with lofty language isn’t surprising. If anything, it would be odd to see material money lacking in patriotic rah-rah. But for people living under the Yuan Dynasty, banknotes were wildly new technology. The fact that people believed this promise (and, yes, were executed if they didn’t) enabled the emperor’s novel form of money to be used “universally over all his kingdoms and provinces and territories.”
WE THINK ABOUT MONEY always and never. Always: employment, retirement, state of the economy, college tuition, terrorism funding, trade balance with China, Goldman Sachs, and quick runs to the ATM. Never: how it actually works. In the age of zeroes-happy bank bailouts and even larger amounts of new money created by the Federal Reserve (abracadabra!), the workings of money have become so abstract that they have all but gotten away from those of us who aren’t specialists in monetary policy.
But cash we think we know. It’s real, at least real enough that you can hold it, smell it, and want to wash your hands after handling it. Paper notes and metal coins are the treasures of our childhoods, tucked under pillows by tooth fairies, delivered in secret by doting grannies, and stashed safely in colorful lock boxes as we saved up for a new toy. Despite money’s dull textbook definition—medium of exchange, unit of account, store of value, and method of deferred payment—it is by way of cash that we first come to have any understanding of or relationship to this civilization-powering invention. When the word money reaches the ears, even Wall Streeters who hawk collateralized debt obligations will, at some level, picture a pile of Benjamins.
(The language of money, by the way, is easily garbled. You may stop at the ATM to get some cash, but when you read in the Wall Street Journal that Intel or Boeing has a lot of cash, that obviously doesn’t mean physical notes and coins. It means liquid assets: money that can readily be spent. In this book, when I use the word cash, I’m talking about physical objects. I will also sometimes use hard currency, physical money, or material money, just to mix it up a little. When I use money or currency, I’m talking in general terms, which means both material and electronic forms, unless otherwise specified.)
Our adult brains may get hung up on money’s poor distribution, tendency to inflate, and penchant for catalyzing strife, but that childhood longing for cash in hand still lingers in corners of the mind reserved for simpler thoughts. This may explain why spotting a penny on the ground can spark a tiny subconscious rush, one that is then, just as quickly, extinguished by our more rational selves, which know full well that a penny—let alone a dime—is essentially, and increasingly, worthless. Economists will tell you that it’s not even worth the time and financial hazard involved in stooping down to pick it up, possibly resulting in a back injury.
Complain as we may about reckless bankers or the federal budget, we are believers in cash. We even worship it. You may not have a god or buddha in your life, but you very much have this faith. I don’t mean you covet money like some jerk, unless you do, in which case you are. No, you have faith in money’s value. You believe in it because everyone else does, which means our faith in it is also a trust in each other—a belief in a shared purpose, or at least a shared hallucination. By the mere act of using the national currency, we all participate in this peculiar religion.
This notion is pedestrian to economists, who are busy calculating the Herfindahl-Hirschman index and the Kakutani fixed-point theorem, or struggling to figure out how to reduce unemployment while keeping inflation in check. Slide money under the microscope, though, and it reveals a simultaneously petrifying and marvelous secret: its value lives and dies in our heads. As the writer and satirist Kurt Tucholsky once put it: “Money has value because it’s universally accepted, and it’s universally accepted because it has value.” That is, until something breaks the spell.
Ironically, Kublai Khan’s success with paper money is precisely what led to economic catastrophe. The Yuan Dynasty rulers gave in to a temptation that has plagued currency issuers and grade-schoolers throughout history: if no one ever bothers to redeem his banknotes for coinage, why not just print more? You can almost imagine the conversations among Khan’s advisory team: Sire, your subjects have such confidence in the redeem-ability of the paper that they never bother to. The perceived value of the paper means you no longer need a one-to-one correspondence between your stockpile of coinage and the amount of paper produced. Heck, boss, you don’t even need a one-to-ten correspondence.
But faith is a fragile thing. Doubt can be sowed by all kinds of events: war, natural disaster, counterfeiting, and bank failures being some of the most common culprits. For the Great Khan, the poison was an inundation of new money into the economy. When you can enrich yourself merely by printing more paper promises that never get challenged, it’s hard not to do so. Monetary systems, however, require that there be a certain scarcity, or perceived scarcity, of the stuff. When Khan’s currency lost that, the value—the purchasing power—of the peoples’ money suddenly plummeted, and the paper money system collapsed. It would be centuries before it would resurface, this time in Europe.
ON A FIERCELY COLD AND windy December morning, Glenn Guest walks into an unmarked diner in the northeastern Georgia hamlet of Bowman, orders a bacon-egg-and-cheese biscuit, helps himself to a cup of coffee, and sits down to discuss the Antichrist. Jim’s Grill used to be “a proper diner” just up the road, but after a fire the owners relocated here, to a small brown barn with green trim. Locals dressed in coveralls and camouflage, on their way to work at poultry farms or one of the nearby granite foundries, stop in to discuss Georgia Bulldogs football and vacuum up scrambled eggs, sausage, grits, and biscuits served on Styrofoam plates.
Guest is the pastor at Shiloh Baptist Church in the neighboring town of Danielsville. He eats at Jim’s Grill at least once a week, and often finds himself in conversations about scripture. He isn’t a pushy proselytizer.
“I’m not saying I’m smarter than the average bear. Not by a long shot,” says the fifty-nine-year-old Georgia native, speaking in a slow cadence, and frequently affixing the phrase “Lord willing” to the start or finish of his sentences. He wears blue jeans, a navy blue flannel shirt, and a black parka. His gray mustache is closely cropped, and his dark gray hair holds the wake lines of his comb for much of the day.
Guest doesn’t believe people who claim to know exactly the date and time Jesus will
make his encore. “But of course it is coming,” he says. “These things must come to pass.” Then: “If you don’t eat grits very much, you’ll like them more, I think, with some extra salt. I like to use more salt.”
I follow his advice but still find the grits to be inferior to the sloppy peach cobbler. Certain information in the Bible and the Book of Revelation, Guest says, is there for all to see. Jesus will come back; the events will be ugly for nonbelievers; signs of the impending showdown—or hoedown—are hiding in plain sight. Many signs are already evident, and one of them is what’s happening to money.
Guest carries a leather case with two zipped pouches, inside of which he tucks his marked-up copy of the King James Bible, as well as a mess of papers, and a small maroon electronic device that looks like a foreign language dictionary. It’s a Bible passage locator, searchable by keyword.
When I ask about cash and how it relates to the end of the world, Guest doesn’t need to look anything up. With clasped hands resting on the edge of the diner’s fold-up table, he recites Scripture’s most forceful and instructive passage connecting the money in our pockets to Satan’s grand plan:And he causeth all, both small and great, rich and poor, free and bond, to receive a mark on their right hand, or on their foreheads; And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. (Revelation 13: 16–17)
A few years ago, Guest wrote a book called Steps Toward the Mark of the Beast. When I found Guest’s book online, I figured that he might be able to help me understand why so many people loathe the prospect of a cashless society. “I didn’t want to write the book,” he says. “I really didn’t. But the Lord wanted me to, and so I prayed that he help me write it in a way that would be easy for people to understand.” In the book, Guest explains that one of the ways the devil will try to supplant God in the days before judgment will be to control commerce. Cash transactions are anonymous and untraceable, which means putting an end to them will help the Beast seize the reigns of the economy.