Reviewed by Kathy London
This book was written by David Wolman, who would like to dispense with physical money. As he puts it in his book “Physical currency is a bulky, germ-smeared, carbon-intensive, expensive medium of exchange. Let’s dump it” in favor of electronic money.
Money has always puzzled me. How can something so important be so abstract? As Wolman tells us, you may not have a god in your life, but you have faith: Faith in the dollar’s value, faith in each other and in our shared government. We are believers. I guess I have mostly dumped cash already. There is no wad of dollars in my mattress. My money mostly exists in accounts I access on the Internet. A lifetime of labor, distilled into 1s and 0s in some server out there. Talk about faith!
Interwoven with interviews and his personal experiment of living without cash for one year, Wolman offers a lot of fascinating information: the history of money, how issuing currency profits governments and establishes their power, how a shortage of currency helped fuel the American colonies’ revolution, why the U.S. keeps minting pennies and nickels at a cost above face value, how many countries have given up their own currency and use U.S. dollars, and why some people think the end of cash would be the beginning of the Apocalypse. Reading about counterfeiting is, alone, worth picking up the book. (North Korea runs on counterfeit U.S. dollars? That’s infuriating.)
The concept of money is world-changing because it allows for commerce beyond barter. Money lets people store and move value, not just within a village, but across the world. Gold makes excellent physical money. Gold is durable, safe to handle, easy to test for authenticity, and won’t decay or catch fire. And it shines – people love bling. But, until recent industrial uses, it’s been worthless in the sense you can’t eat it or heat with it. Gold has only the value we agree to give it. Bizarrely, a small group of men sitting around a table in the U.S. in 1944 decided an ounce of gold would be worth $35. Today gold trades in a free market and worth over $1600 and ounce. But gold is not perfect money. It can fuel inflation and deflation, and won’t stop revolutions and depressions. Wolman thinks gold is just an older and more comfortable abstraction.
Wolman explains the problems with cash. Cash must be printed, guarded, and lugged around. Cash can be stolen or lost or destroyed. Cash is contaminated with germs and traces of cocaine. Cash enables tax-cheats. If you are poor, all these costs and risks hit you the hardest. Without the ability to convert cash into electronic money, you are excluded from banking and denied a safe and reliable way to save.
Cash offers anonymity in transactions and therefore liberty. But because of this, cash is the choice of criminals worldwide. About 60% of the US currency in circulation is $100 bills. How many are in your wallet?
Wolman thinks technology can now cure the problems of cash. Person-to-person transfers via smart phones counter credit card fees. People accumulate more debt when using credit cards than cash, but if you pay with your smart phone, apps could flash vivid images to make the transaction more “real”. Reading how such transactions will work is a view into a future that is standing on our toes.
This was an interesting book and may help readers see the current move away from cash as a good trend. You can’t fight it anyway. Electronic money is taking over the world already, so the only battle left for Wolman is to convince governments to stop issuing cash. As long as that doesn’t bring on the Apocalypse.