Consensus Wealth

I recently reread most of the novels in Barbara Hambly's Benjamin January mystery series, set in New Orleans around the 1830s (beginning with A FREE MAN OF COLOR). In a later book of the series, Benjamin and his wife suffer dire financial loss in the bank collapses of that period. That plot element reminded me of how the value of money depends on our mutually agreed belief in its value.

There's an incident in Heinlein's TIME ENOUGH FOR LOVE, when Lazarus Long works as the banker in a frontier-like town on a colonized planet, where he burns a batch of paper money (after recording the serial numbers) because storing too much in the bank presents a theft hazard. The other character in the scene is horrified, since he doesn't grasp that dollar bills aren't wealth in themselves, only a portable representation of wealth. The value of money is grounded in consensus reality, not anything objectively "real."

In an early scene in S. M. Stirling's DIES THE FIRE, when civilization starts to collapse because all advanced technology has instantaneously stopped working, one of the protagonists gathers a group of her friends to lead them to a place of refuge. Before setting out, they stock up at a local store. She feels a bit guilty for accepting food and other valuable items in exchange for bills and coins, because she understands—as the storekeeper does not—that within a few days money will become worthless.

In the early history of what we know as money, it consisted of coins made from "precious" metals or other substances rare enough to be considered valuable. Users had an objective way of determining whether the "true" value matched the claimed value, because a coin could be tested to reveal contamination with base metals. Eventually paper money and other devices for exchanging wealth without carrying heavy coins all the time were invented. Bankers issued promissory notes; merchants bore letters of credit from one city to another. The first paper money ("banknotes") was issued by individual banks, as illustrated in Barbara Hambly's series. When Benjamin January's bank failed, no other institutions would recognize money issued by it as valid. Paper money printed and backed by the government obviously represented an improvement in financial stability. Then we got credit cards, so that a buyer didn't have to use cash at all in many situations. (As a child, I thought buying something with a card meant you didn't have to pay for it. Alas, some adults actually use their plastic as if that's what it means.) Now we can pay for material goods in a purely digital mode, by transmitting our credit card numbers electronically. Wealth has become rarefied, almost imaginary.

I can enter numbers on Amazon and receive a package a few days later. The money represented by those numbers flowed from the government (Social Security and military pension) into our bank account, from our bank to the credit card issuer (via checks I write for payments, which I could also do with ones and zeroes online if I chose), and from American Express to Amazon, without a cent of cash changing hands at any point. The process feels magical, almost miraculous. It illustrates what a tremendous amount of faith our system depends on. Of course, the down side of this miracle is that we've had our most-used credit card's account number changed at least three times within the past few years because it keeps getting hacked, even though the cards have never left our possession. Thanks to computers, fraud artists don't need the physical plastic to steal from a card holder. They simply run a program to try a series of numbers at random until they hit one that works.

Will the often-predicted cashless society ever come into existence? We have that capability now. Some people, I hear, use debit cards for everything, even coffee at Starbuck's. I don't think cash will become obsolete in the foreseeable future, though. Even now, not everybody has credit cards, some (such as the homeless) don't have bank accounts, and we'll probably always need tangible money for casual exchanges between individuals.

Margaret L. Carter

Carter's Crypt