The End of Money: Counterfeiters, Preachers, Techies, Dreamers--and the Coming Cashless Society

239 Pages·2012·1.27 MB·English

by  David Wolman

T $25.00 / £16.99 / $28.00 CAN
TH E E ND
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E
THE END OF MONEY
PRAISE FOR

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“A world with diff erent and new money will be a diff erent and new world. We are
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headed there more rapidly than most suppose. The lives of citizens and central
bankers alike will be profoundly altered. This book should be read by everyone O F M O N E Y
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who cares, and that should be almost everyone.”—Lawrence H. Summers,
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President Emeritus of Harvard University, former Secretary of the United States
Department of the Treasury, and Charles W. Eliot University Professor at Harvard’s For ages, money has been represented by little
M metal disks and rectangular slips of paper. Yet
Kennedy School of Government
the usefulness of physical money—to say noth-
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ing of its value—is coming under fi re as never
“Cash is a mystifying artifact of a bygone era. It’s ineffi cient, inconvenient, and
N before. Intrigued by the distinct possibility that
downright dirty—yet we still have wallets full of it. But not for much longer. Over
DAVID WOLMA N is a contributing editor E cash will soon disappear, author and Wired con-
at Wired. He has written for such publications the next few years, money will change more than it has for centuries. David COUNTERFEITERS, tributing editor David Wolman sets out to investi-
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as Outside, Mother Jones, Newsweek, Discover,  Wolman’s globetrotting exploration tells how, with riveting anecdotes and insights gate the future of money . . . and how it will aff ect
Forbes, and Salon, and his work has appeared into the past and future of payment.”—Chris Anderson, Editor in Chief of Wired your wallet.
PREACHERS,
in Best American Science Writing 2009. A former magazine and author of The Long Tail and Free: The Future of a Radical Price Wolman begins his journey by deciding to
Fulbright journalism fellow in Japan and gradu- A shun cash for an entire year—a surprisingly
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ate of Stanford University’s journalism pro- “Gather up your 25 rectangles of colored cotton fi ber and assorted scrap metal D C TECHIES, DREAMERS— successful experiment (with a couple of notable
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gram, he now lives in Portland, Oregon, where plugs, and put them down on the bookstore counter, my friends. This is the TH U exceptions). He then ventures forth to fi nd peo-
hIned irveidcueaivle Adr tais t2 F0e1l1lo wOsrehgipo.n H iAsr tpsr eCvoiomums bisosoiokns sinh aar pveesryt, lmarogset awmhialez.i nEgslyp ewcieallll-yr essteuanrncihnegd c ahnadp tfears coinn actoinugn tbeorfoekit itnog c, opmaset a(lfoankge E CO TECHNTER AND THE COMING pahlee aadn. d Inte cHhonnoollougliue, s hteh adt riilnluksm iMnaatie Ttahies rwoiathd
are A Left-Hand Turn Around the World and wampum!) and present (North Korean supernotes!). Read this book and you MIIEFE Bernard von NotHaus, a convicted counterfeit-
Ratig whtwinwg .dthaev idM-owtohlemr aTno.ncgoume . aVnids itf ohlliosw W heibm s iotne will understand how the world works and where it is headed, and why a culture NG CS, DITER CASHLESS SOCIETY egro vaenrndm aelntet rpnraotsiveec-uctuorrrse hnacvye elavbaenlgeedl ias td owmheosm-
perched on the brink of cashlessness is still minting pennies.”—Mary Roach, ARS
Twitter at @davidwolman. author of Stiff and Packing for Mars SHEA, P tic terrorist. In Tokyo, he sneaks a peek at the
LMR latest anti-counterfeiting wizardry, while puz-
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SRA zling over the fact that banknote forgers depend
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“Say what you will about sophisticated fi nancial instruments like credit default S—H on society’s addiction to cash. In a downtrod-
swaps and collateralized mortgage obligations. Our biggest fi nancial blind spot O ER den Oregon town, he mingles with obsessive coin
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may be the cold, hard cash in our pockets. David Wolman uncovers the hidden IE S, collectors—the people who are supposed to love
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costs of coins and currency in this entertaining and eye-opening book that Y cash the most, yet don’t. And in rural Georgia,
will appeal to anyone with a pocketbook.”—Daniel H. Pink, author of Drive and he examines why some people feel  the end
A Whole New Mind of cash is Armageddon’s warm-up act. After
W stops at the Digital Money Forum in London
O and Iceland’s central bank, Wolman fl ies to
L Delhi, where he sees fi rsthand how cash penal-
DA CAPO PRESS
M
izes the poor more than anyone—and how
A Member of the Perseus Books Group
www.dacapopress.com A mobile technologies promise to change that.
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Told with verve and wit, The End of Money
explores an aspect of our daily lives so funda-
Origami dinosaur by Won Park
Jacket design by Cooley Design Lab D A V I D W O L M A N mental that we rarely stop to think about it. You’ll
Author photograph by Brett Patterson
never look at a dollar bill the same again.
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The End of Money
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Also by David Wolman
A Left-Hand Turn Around the World
Righting the Mother Tongue
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The End of Money
Counterfeiters, Preachers, Techies, Dreamers—–
and the Coming Cashless Society
DAVID WOLMAN
DA CAPO PRESS
A Member of the Perseus Books Group
9780306818837-text_Layout 1 11/28/11 9:29 AM Page iv
Copyright © 2012 by David Wolman
Published by Da Capo Press
A Member of the Perseus Books Group
www.dacapopress.com
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or other-
wise, without the prior written permission of the publisher. Printed in the United States of America.
For information, address Da Capo Press, 44 Farnsworth Street, 3rd Floor, Boston, MA 02210.
Da Capo Press books are available at special discounts for bulk purchases in the U.S. by corporations,
institutions, and other organizations. For more information, please contact the Special Markets
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or call [phone], ext. 5000, or e-mail [email protected].
Set in Minion Pro by The Perseus Books Group
First Da Capo Press edition 2012
Library of Congress Cataloging-in-Publication Data
Wolman, David.
The end of money : counterfeiters, preachers, techies, dreamers—and the coming cashless society /
David Wolman.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-306-81883-7 (hardcover)—ISBN 978-0-306-81946-9 (e-book) 1. Money—History. 2.
Paper money. 3. Coins. I. Title.
HG231.W75 2012
332.4—dc23
2011038991
10 9 8 7 6 5 4 3 2 1
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CONTENTS
Introduction vii
1 The Missionary 
2 The Messenger 
3 The Counterfeiters 
4 The Loyalists 
5 The Patriot 
6 The Traitor 
7 The Revolutionaries 
8 The Emissary 
Acknowledgments 
Notes 
Bibliography 
Index 
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INTRODUCTION
On Christmas Eve 2009, Umar Farouk Abdulmutallab began the journey
he thought would take him from this world into the next, and into the
awaiting embrace of six dozen virgins. He carried nothing more than a
small duffle bag and, in his underwear, the ingredients for plastic explo-
sives. If not for some fumbling on the part of the aspiring bomber and
the reflexes of a few passengers and the crew, Northwest Airlines Flight
253 would have exploded somewhere over Watford, Ontario.
Eight days earlier, Farouk Abdulmutallab stood at an airport ticket
counter in West Africa. With $2,381 in cash he purchased a one-way
ticket from Lagos, Nigeria, to Detroit, connecting through Amsterdam.1
Pardon me for my ignorance about the inner workings of the global war
on terror and airline ticketing procedures, and for a line of reasoning
that promises to infuriate the ACLU, tax-evading militiamen, the U.S.
Treasury, and the Russian mob, but I have to ask: in the post-9/11 age,
who uses $2,381 in cash to buy a one-way ticket to the other side of the
world besides crooks and terrorists? Think of all the mileage points lost!
Money is no object. Maybe so for a lucky few. Except, of course,
money is an object—tearable, flammable, even wearable. It’s also an ob-
ject of obsession, inquiry, aspiration, remorse, delight, disdain, curiosity,
and just about every other sentiment imaginable. Money takes different
forms, too: credit and debit cards, checks, money orders, lottery tickets,
vii
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viii | INTRODUCTION
gift cards, Disney Dollars, ones and zeroes on distant servers, and, for
the time being at least, rectangular slips of paper and round coins that
economists call physical representations of sovereign currency, and that
the rest of us call cash.
A few years ago, I started bumping into stories about the cost of man-
ufacturing coins and maintaining them in the economy, and suggestions
by some pundits that the United States go cold turkey on pennies. A sci-
entist at MIT founded Citizens for Retiring the Penny, and for a few years
the guy was everywhere: 60 Minutes, NPR, the New York Times, ABC
World News Tonight, the Boston Globe, The Colbert Report. He had his
talking points down pat, about time and materials wasted, potential ben-
efits to the economy, and research showing that rounding prices up
wouldn’t hurt consumers.
The debate made me realize that I have a bit of a soft spot for pennies,
probably because of Bazooka chewing gum and a Bostonian named Bob.
When my older brother and I would take the train home from school
back in the early 1980s, we would often stop at a corner store called Bob’s
Waban News. While Bob griped about the Red Sox and served coffee to
his regulars at the bar, kids filtered in and out to order Slush Puppies or
purchase Charleston Chew candy bars. And if we had any pennies, we’d
take our shot at the box.
Above the register, just below where the wall met the ceiling, Bob
had affixed a cardboard box, perhaps sixteen inches across. It had no
top, and inside was a bell. If you lobbed a penny up and missed the box
or—more demoralizing—your penny landed inside but failed to hit the
hidden bell, you got nothing. If you hit the bell, you earned a piece of
Bazooka bubble gum, not to mention glory. Ding! If we close the book
on pennies, what would happen to this kind of game? What would
people throw into wishing wells?
Yet nowadays, nobody seems to like coins except collectors, which
may explain why those Coinstar machines standing post outside super-
markets process more coins than the U.S. Mint manufactures in a year.
In the words of one anonymity-requesting economist I spoke with at the
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INTRODUCTION | ix
U.S. Treasury: “I hate coins. Why do we even have them?” One answer
is that pennies honor Abraham Lincoln. But maybe the national holiday,
a gigantic memorial, and his face on a banknote (purple fives!) are suffi-
cient. Some might even say it’s an insult to the sixteenth president to put
his image on unwanted coins that can’t buy anything.
Despite my nostalgia for Bob’s Waban News and those brick-like
pieces of Bazooka gum, the logic expressed by retire-the-penny types
resonated with me. I didn’t care that they had once been mocked on an
episode of The West Wing, but I did think that to avoid sounding petty,
they needed to amp up the bluster. I wrote an essay for Wiredadvocating
not merely for the end of small change, but an end to physical money,
period. And I didn’t hold back. “In an era when books, movies, music,
and newsprint are transmuting from atoms to bits, money remains irri-
tatingly analog,” I declared. “Physical currency is a bulky, germ-smeared,
carbon-intensive, expensive medium of exchange. Let’s dump it.”
Reader responses were . . . passionate. “Wolman is a fascist. . . . Taking
away cash would be like taking away our guns: One needs it most only
after it’s gone.” Another read: “My cash is my business.” I was accused of
shilling for secret lobbying groups, and of sacrificing “the last vestiges
of privacy” so that “those bastions of clarity and honesty called banks
and credit card companies can mine our every transaction.”
I had smacked a nerve. People are willing to kill for cash—we know
that. But what I was hearing made me think that people might kill to
keep it. That got me wondering: what is cash, anyway? The simple an-
swer is little metal discs and strips of paper bedecked with dead white
guys and cryptic messages that make Nicholas Cage go even more bug-
eyed. But what is its place in our economy, our culture, and our minds?
Could we ever do without it? Should we?
Although predictions about the end of cash are as old as credit cards,
a number of developments are ganging up on paper and metal money
like never before: mistrust of national currencies, novel payment tools,
anxiety about government debt, the triumph of mobile phones, the rise
of virtual and alternative currencies, environmental concerns, and a