Also in Slate, Seth Stevenson embarks on a quest to survive without cash.
Cash is ridiculous. Like hugging or shaking hands, money is one of those social constructs that you’re better off never thinking about too deeply, lest you begin to wonder how someone decided that this should be how things work. Imagine the first guy broaching the idea: Hey there, brother Jebediah! Instead of growing my own sorghum—sorghum being what I imagine we all ate in olden times—I was wondering if you’d like to toil a few hours longer to grow some extra for me, and in exchange, I’ll give you … some of these pieces of metal! Deal?
It sounds like a prank, right? Money is a confidence game, a mass delusion that only works because we’ve all been had together. That’s why it’s best not to think too much about it. As when Wile E. Coyote runs off a cliff, the moment we realize what’s really going on with money is usually the moment the whole system comes crashing down.
The psychic gymnastics necessary to accommodate money are the central theme of journalist David Wolman’s provocative new book, The End of Money: Counterfeiters, Preachers, Techies, Dreamers—and the Coming Cashless Society. Even Wolman’s title contains a trick—note how it conflates money and cash, two concepts that, to economists, are very different things. Money is any tradable store of value; it can exist in your pocket or on a bank statement, in dollars or Euros or, if you’re in prison, in cigarettes. Cash is only the physical instantiation of money, and, as Wolman points out and as everyone in the Western world knows, it is on its way out. Thanks to technology, trustworthy banking (well, mostly), and our insatiable appetite for convenience, we’re all carrying less and less cash, and soon we’ll probably quit it altogether.
In addition to being a tidy history of money and its discontents, Wolman’s book is also a travel story. It chronicles his trip around the world to meet many of the people who are working to bring about a cash-free civilization, as well as a few who are working to stop it. Each of these warring sides is basically hung up on the same issue: the degree to which the reliability of our currency depends on its physicality. Even though we long ago abandoned cash as the only way we trade—it’s not even the primary way we trade anymore—it seems impossible to understand money without thinking about cash.
“When the word money reaches the ears, even Wall Streeters who hawk collateralized debt obligations will, at some level, picture a pile of Benjamins,” Wolman writes. “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.” If we get rid of cash, would money still work? Would the mass delusion continue?
Wolman picks a side in this fight: He hates cash, and he talks to several smart people who aggressively make the case against paper. Cash is inconvenient. It can’t be traced or insured; if you lose your cash or if it’s stolen, that’s that. It’s expensive—think about all the costs involved in producing, moving, protecting, scrutinizing, and reissuing bills and coins. Wolman cites a study that estimates that by switching from paper-based currencies to electronic ones, countries could save about 1 percent of their gross domestic product annually. That’s about $150 billion a year in the United States. Cash is also dirty, both literally—all your bills are contaminated with germs and drugs—and legally, a key enabler of the criminal underworld and mass tax evasion. If we didn’t have paper money, we’d probably have less crime and better-funded governments.