The End of Money

by David Wolman

  “Once Satan has control, we will have a completely closed economic system,” says Guest. Only those who accept the Mark of the Beast—if not in the form of a literal mark on the forehead, then perhaps a microchip under the skin—will be able to participate in commerce. All transactions will be knowable to Satan. From his hyper-wired Orwellian lair, the devil will know that you were unwilling to accept the mark. He will then turn you and all other refuseniks into “economic nonentities,” unable to buy or sell, thereby excluding you from society and blocking your access to food or shelter. On the upside, those who resist the mark and maintain their faith in the Lord will receive the ultimate hardship pay: eternal bliss.

  Guest told me about a Spanish resort where patrons can have a microchip implanted under the skin to make transactions simpler and, presumably, to coax them into spending more at the bar. (It’s not easy to carry a wallet in a thong bikini.) It sounds like something right out of Blade Runner. Yet evidence supporting Guest’s fear about controlled commerce isn’t confined to such oddities. In the winter of 2010 the New York Times echoed this prophecy in an editorial about the decision by MasterCard, VISA, PayPal, and others to stop processing payments for Wikileaks: “A handful of big banks could potentially bar any organization they disliked from the payments system, essentially cutting them off from the world economy.”

  I tell Guest that I recently met with electronics experts at Hitachi in Tokyo, who are developing biometric devices for seamless transactions. One of these technologies uses the unique three-dimensional pattern of veins within every person’s fingertip. Touch your finger to a register, vending machine, or subway turnstile and you can instantly settle up without having to break your stride. I resist sharing that I’m eager to see these innovations put to use. Provided they have adequate privacy controls, and supposing for a moment that they will not bring about the end of the world, I have a hard time seeing this kind of technology as negative.

  I’m also a little reluctant to share my pro-digital sensibilities with Guest because many people see cash’s anonymity as an almost sacred virtue, as if cash and liberty are synonyms. When you buy something with cash, it’s hard for anyone to know that you did so. You may still have your receipt, but that connection between you and the purchase is yours to control—or tear up. When using cash, versus credit, to score some cocaine, buy a secret Valentine’s Day gift for your mistress, or pay a field crew of undocumented workers, you can be confident that your transaction can’t be traced, or at least can’t be traced by the method of payment itself. (In-store surveillance is a different story.)

  In the movie Minority Report, Tom Cruise’s character sees personalized ads as he walks through a public space, thanks to specialized cameras that use the pattern of his irises to confirm his whereabouts. (The cameras actually mistake him for someone else because he’s using a pair of stolen eyes, but bear with me.) The ads speak to his personal tastes, or an estimated version of them, based, the audience infers, on his extensively recorded and analyzed consumer history. Most of us don’t like this idea; it crosses what Google executive chairman Eric Schmidt, of all people, once called “the creepy line.”2 We also worry about our digital footprints because data from transactions with credit cards, for example, can be exploited by identity thieves. Stick with cash and you’re that much more off the radar.

  Guest knows a thing or two about these and other relevant electronic money technologies. While serving in the U.S. Navy in the early 1970s, he helped maintain machines in Key West, Florida, that coded and decoded radio messages sent between the mainland and the fleet at sea. Since then, he has kept close tabs on advances in wireless communications, especially ones at the core of cashless transactions. These are the very tools, he says, that are setting the stage for the beginning of the end.

  It was one evening in Key West when Guest came to believe in the Lord. There were no fireworks or sudden speaking in tongues. “I was just sitting there in our living room. It was a very nice mobile home park there on Stock Island, just across from Key West. We were maybe 200 yards from the water, there was a pool, and they cut your grass for you and everything. Anyway, I came to see that God was in a position to deal with me, and that he always had been.” For Guest, a sense of guilt had been lifted, although not because he had lived an especially sinister life. “We are all sinners. With revelation, I could see that Jesus was the propitiation—the payment—for the sins of the world.”

  With newfound faith, he and his wife returned to rural Georgia, where they had both been raised. Guest joined the ministry and has since been doing his best to warn anyone who will listen about what to expect when the end is finally here. What most people fail to notice, he explains, is that the slow lead-up to the tribulation can be disguised to look like progress. Much like the move from coins to banknotes, checks to credit cards, and now credit cards to payment technologies that live inside our cellphones, the Mark of the Beast may seem like just another positive innovation.

  This illusion, says Guest, is to be expected, considering the serpent’s cunning. “Imagine that all of your personal information is embedded in a chip beneath the skin—let’s say on the back of your right hand. If you were to get sick and go to the hospital someplace far from your home, doctors could use the chip to learn who you are and what your medical condition is. That information could save your life.” Guest speculates that people may end up dying because they don’t have the chip, which will compel the rest of us to conclude that some kind of biometric identification system at the national or international level is both prudent and moral. From there, the move to completely digitized commerce is almost a given.

  But eliminating cash is only the latest step toward the mark. Guest explains that prior ones include the elimination of the gold standard, the establishment of the United Nations, the growing power of Wall Street banks, the advent of barcodes, and the more recent use of radiofrequency-emitting microchips used to track merchandise.

  If Guest had his way, we would return to the gold standard, or something like it; a system of “real value” for currency. “People think a paper dollar is worth such and such. Because people believe that, you can still exchange it for goods and services. But I could print ‘1 basketball’ on a dollar—that doesn’t make it a basketball.” Money has no intrinsic value anymore, but at least with cash, says Guest, flawed as it may be, we can preserve the freedom that Satan aspires to eliminate.

  “Hey, what will the Rapture be like?” I ask.

  “I can’t imagine what the wrath of God will be like,” says Guest. “No one can.” He finishes his biscuit and stands to refill his coffee at the beverage bar. “But those who are reconciled with the Lord and pray that he open heaven’s treasury of wisdom to them have nothing to fear.”

  Another customer opens the front door, and the sparkly paper snowflakes hanging from the ceiling are sent swinging in a rush of wind.

  FOR MOST OF HUMAN HISTORY, money didn’t exist. Tribe or village chieftains told their minions who would do what, who would eat what, and who would have what. If the people desired or needed more spears, women, or real estate, they just did battle with some other village, hoping to come out of the fray with a greater net worth, or they just had to make more spears and have more children.

  These no-commerce communities did pretty well, communism’s recent flops notwithstanding. Indigenous peoples from the Arctic Circle to the Australian outback successfully distributed goods and divvied up labor and wealth. Not that this life was easy. For these societies to function, they often depended on iron-fisted rulers, slavery, and the all-around hassle of having to gather one’s own firewood, hunt food, build shelter, and defend against marauding invaders who were after your limited supply of everything.

  The technology known as money came about because we are driven to trade. Some scientists speculate that the motivation to trade is even part of our evolutionary programming.3 If you’re sitting on a pile of vegetables but you’re freezing cold, while I’m hungry
and carrying more animal furs than I could ever use, wouldn’t we, almost instinctively, see a mutually beneficial accord in the making? Let’s make a deal!

  Swapping your food for my furs will suit us well, but this form of trade hinges on what British economist William Stanley Jevons famously dubbed the “double coincidence of wants.” Should you not want to trade your potatoes for my furs because it’s summertime, we’re out of luck. That is, unless we could come up with something else for me to give you—something that you know some third party will also willingly accept in an exchange conducted four hours or four months from now. What we need is money.

  No dolphin or chimpanzee will ever paint a Picasso, compose a symphony, or pen a sonnet. Music and art are often the go-to examples of what sets humans apart from other animals. Yet so does money. It’s usually excluded, though, from discussions about human ingenuity, treated more like a slovenly step-cousin. We should keep it at arm’s length, deal with it only when we have to, and get back to reflecting upon more spiritually enriching endeavors.

  Such a narrow view of money belies its inner magic and civilizing power. In this we could learn a thing or two from economists. They see just how ingenious and perplexing money is, and how creative, foolish, and passionate we are in our handling of it. Perhaps more than anyone, economists understand that money is a fiction, and that the entire financial system rests on the head of this socially constructed pin. Scary as that may be, it also means money can be anything we want it to be. Print “1 basketball” on a dollar, and it actually can be a basketball, as long as we all play along.

  For millennia, money took the form of various objects: things you could hold in your hand or hitch to a post. Feathers, shells, coconuts, butter, salt, whale teeth, logs, cacao seeds, tobacco, dried fish, livestock, and slabs of rock as big as a car.4 Stone monuments that look like table-size sand dollars were, and to a limited extent still are, used for money on the Micronesian island of Yap, but their primary use today seems to be as economists’ favorite example of the zany, and ultimately arbitrary, forms that money can take, and to illustrate the point that items themselves don’t have to move for them to function as money.

  Only the understanding of ownership has to move. Value can transfer without the object doing any travel because the people involved in the exchange are cool with it. If something can perform this function, it can be money. “Money represents pure interaction,” wrote the celebrated German philosopher Georg Simmel in The Philosophy of Money. “It is an individual thing whose essential significance is to reach beyond individualities.” 5 Money is what money does.

  Part of its genius is that it allows us to specialize. If you think you’re busy now, imagine having to also grow and prepare all of your own food, heat your house, sew all of your own clothes, educate your children, perform your own surgeries, build your own computers, make your own movies, and write your own books. Money saves you from all that by enabling trade. As capitalism godfather Adam Smith once put it: “Man continually standing in the need of the assistance of others, must fall upon some means to procure their help.”6 Thanks to money, whatever we earn plying our individual trades will, or should be, exchangeable for the goods we need and—for those of us fortunate enough to afford more—the goods we want.

  But even with the early forms of money, before the arrival of coins a few thousand years ago, a schism was brewing between media of exchange that were useful items versus purely representative stuff. You can count cows easily enough, and you can also drink their milk or eat them. Red feathers, however, have no intrinsic value, unless you’re a red bird. In currencies like feathers or stone monuments, we see the precursors to modern cash: without collective belief in their value, they’re worthless.

  The inadequacies of early currencies became more and more acute as economies grew. For one thing, not all feathers, shells, or whale teeth are alike. Even if you try to limit trading to similar ones, you run into the problem of nonstandardized units. These objects also weren’t limited in supply. A sudden glut could undermine the value of all of the existing ones, while a shortchanged supply of money could compel people to find new and more violent means of procuring goods and services.

  Another hiccup with these rudimentary exchange systems was decay. What if those feathers start to fall apart, or the dowry payment of five cows just keeled over? Money needs to be a dependable store of value through time. As trade expanded—not just to the next village, but to the next kingdom, country, or continent—the need for consistent value only intensified. The invention of coins some 2,600 years ago in the ancient Greek kingdom of Lydia helped circumvent many of the limitations of prior currencies. The ruling power would deem coins of a standard shape, weight, and size to be worth x amount of labor, crops, livestock, or belly-dancing lessons, so that you didn’t need a wallet full of livestock to conduct business, and you didn’t have the problem of decay like you did with tobacco leaves or sacks full of fish heads.

  With metal coins, trade could extend however far the belief in the coins’ value could travel. Although a chest full of silver sounds inconvenient, transactions had never known such clarity and compactness. With few exceptions, money in the form of coinage became almost universally accepted throughout the world, a characteristic of cash that was essential to its success. Today, your notes and coins are perfectly populist. Your ability to possess this form of wealth has nothing to do with your citizenship, education, age, credit score, hunting skill, or political or religious persuasions. Your cash is indeed your business.

  Coinage also scored high marks for fungibility. This is one of those annoying econ words, but all it means is that cash is interchangeable across uses. Say I give you $500 to support your family, and I stipulate that you not buy junk food with that money. How meaningful is that? Even if you follow my instructions, you may still, indirectly, use it to acquire junk food, because using my money to buy milk or soccer cleats now frees up other money you’ve obtained from other sources, which you can spend on Doritos. That is fungibility, and it helps explain why cash has persisted through the ages and is almost universally acceptable: it can be used across nearly all uses.

  But fungibility was only one of coinage’s great triumphs. It also formally married the mega-abstractions of the state and money. By splashing the face of a sovereign or other political symbols onto the coins and forcing people to accept them as payment when conducting commerce, rulers literally stamped their authority into existence. The word coin, after all, also means to invent. One of the fundamental ways kingdoms and states establish power is by making the money, controlling its form and supply within their territories, and using it to collect revenue.7

  By the seventeenth and eighteenth centuries, government mints of Europe and parts of Asia were cranking out huge volumes of coins. Iron, bronze, copper, and lead enjoyed sporadic time in the currency limelight, but they paled in comparison to silver and, of course, gold.

  You could say that the story of the monetary system that came to be known as the gold standard begins with our fondness for bling. No one will ever be able to pinpoint when it happened, or who led this reformation in thinking, but one day ages ago, a well-fed and influential someone, somewhere, decided that this shiny material is special—that it’s worth something. Its resemblance to the sun probably gave it an edge. Once our ancestors started convincing each other that their respective deities preferred this material, they went bananas for it: painting it on their faces, entombing it alongside dead pharaohs, wearing chunks of it as jewelry, and using it to jazz up ceremonies and rituals. Its scarcity only added to its allure.

  Our love of gold (and silver, but let’s stick with gold for the moment) injected it with value, fusing the idea of money to a substance like never before. It turns out that those ancestors chose wisely. If you’re going to have physical money, gold is hard to beat: it’s durable and malleable, not poisonous to handle, easy to test for authenticity, and nonreactive, meaning it won’t decay or catch fire. It’s also ju
st scarce enough. All the gold ever mined totals a little over 165,000 tons, which is roughly the same weight as one-and-a-half U.S. Navy aircraft carriers.8

  The psychological sorcery that makes us value something we can’t eat or heat our homes with, and probably don’t want to snuggle up to, is immeasurably powerful. People tend to think, for instance, that gold, silver, diamonds, and even dollars have inherent worth, as if that value emanated from the atoms within these objects, or from the U.S. Treasury imprimatur. Diamonds are the most stellar example of this phenomenon, because the industry, which is to say one monopolistic company, De Beers, has had such success convincing us that diamonds are rare and therefore expensive. They’re worthless, though, unless you want to cut something extremely hard, or plan to use them for some high-tech electronics. But try telling that to a bride-to-be who has her heart set on a certain engagement ring.

  By the nineteenth century, gold had become the foundation of the world’s monetary system, with national currencies stamped out in set weights of it, as well as corresponding coins of silver. Economies chugged along impressively under this new regime, except when they didn’t, which was often, because of revolutions and depressions. Gradually, many governments and economists would come to see gold as precariously inflexible. How can you boost an economy’s money supply when it’s in need of one if the money itself depends on Mother Earth’s willingness to cough it up from some faraway mine?

  Another problem with gold coins was that economic conditions sometimes led people to believe their interests were better served if they didn’t spend or invest. This hoarding only further limited the availability of money. Silver created similar problems but was also subject to oversupply. The Spanish Empire learned this lesson the hard way. After it became unfathomably rich plundering the silver mines of South America in the sixteenth century, a glut of silver eventually led to steep price hikes and steeper drops in the purchasing power of the peoples’ money, similar to the crash in value of those Yuan Dynasty banknotes. When money grows on trees, it becomes no more sought after than leaves.