The End of Money: Counterfeiters, Preachers, Techies Dreamers & the Coming Cashless Society
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Excerpted from Chapter One: The Missionary, from The End of Money: Counterfeiters, Preachers, Techies Dreamers—and the Coming Cashless Society by David Wolman. Copyright © 2012 by the author and reprinted courtesy of Da Capo Press No part of this excerpt may be reproduced or printed without permission in writing from the publisher. 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. 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 exchange, 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.
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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.
