My motivation was to write extensively on all three themes in this week’s post but I decided to simplify my thoughts around one theme. That theme presented itself in each of four specific moments of my trip – currency. Arriving in London from Washington D.C., I rifled through my foreign exchange stash that I carry with the vestiges of travels past. Thankfully, I found my £20 note which was adequate to buy our day pass on the Tube to get from Paddington Station over to Farringdon. However, the London transit authorities had not posted signage in such a way to alert a buyer of tube fare that none of the Circle Line or Metropolitan Line trains were in operation so, once spent, Colleen and I had the privilege of getting as far as Kings Cross and then walking several kilometers to get to our hotel. Having committed to a transaction that was meant to provide an expected utility my behavior changed and blisters on both of our feet were the consequence.
We stayed next to one of London’s great architectural artifacts of the Templars and I was reminded each day of the development of their demand notes that served to inspire the notion of central reserve backed currency. The building’s presence served as a point of reflection all week. I found myself reflecting on the fact I have come to use one of the most anonymous manifestations of their innovation realizing that, at the end of four days in London, I had used less than £100 in cash resorting to credit cards for nearly every meal, hotel, and cab. So, arriving in Switzerland, I had a wad of pounds and pounds of coins which I dutifully converted to Swiss francs – barely enough to get from the airport to downtown. I had to find an ATM at UBS near the Paradaplatz to get an equal sum for our airport return later in the day. I got Zurich’s currency bet almost right and left with CHF10 in the form of two large coins. In Amsterdam, I left the same way I came with the exact €5 note in my pocket having paid for everything there on plastic.
Spending a week in four currency zones gives you an opportunity to think about, well, currency. And if you’re like me, you can find yourself first amusing over the craziness of it all. For example, what genius came up with the idea of the £1 coin which is smaller than most of its pence brethren? Why do the Swiss have such an obsession with color on their notes? However, my reflections, courtesy of the ghosts of the Priory, went much deeper. In the final analysis, what does currency actually mean and what could I learn from this week’s destinations to think about currency assumptions?
Here goes. First of all, I think that currency, at its core, is a manifestation of the disintegration of community. When value was exchanged between suppliers and finished good producers, there was an implicit need to know the person with whom you were dealing. To succeed, you needed to establish, and be worthy of trust. And to be a surrogate of the transactions of others, you need to have the highest integrity of all. Beyond the mere recording of debits and credits, you needed to have a moral character which placed you above the seduction of holding and transferring the wealth of others. To be engaged in commerce or banking, you need to commit significant time to reputation – a phenomenon that has its highest value in community.
Reserve-based currency has given us the lazy, disintegration impulse to anonymize our transactions. When we hand someone a note or coin, one of the social messages we are communicating is a statement of finality. “By virtue of this payment, we’re done,” we are saying. We don’t have to remember what we may owe or be owed. In a tragic irony, we once exchanged things that had social value – gold, silver, or commodities. For close to two hundred years, we saw these be replaced by something with less permanence and no intrinsic value – paper. In our highly evolved state, we further reduced the exchange to a magnetic impulse using a legacy of the Third Reich – the linear magnetic tape. And now, a sizable number of transactions occur without so much as an artifact at all. Whether you’re ICAP trading $1 trillion of credit default swaps or you’re AIG holding counter-party risk, the exchange of most face value on Earth has been reduced to an entity-less phantasm.
On a recent flight across the United States, I was intrigued by what I believe could be an illegal announcement in light of U.S. inter-state commerce laws. If you wanted to eat or drink anything other than 100mls of Homeland Security approved toiletry liquid, you needed to “buy onboard”. But, we were informed, the airline no long accepts anything but credit or debit cards. We are living in a world which is rapidly moving towards an insidious phase in which the access to a bank card – which obviously necessitates a monopolistic mandate that every person MUST use a bank – is a precondition to engage in commerce.
Some of you may not get the message I’m trying to communicate but I hope those of you who do get it make a point to circulate this blog post or at least explain it to others. Our value exchange system has actually crossed an immoral and unethical tipping point. Currency advocates argued that currency itself liberated international trade and created a mode of access to markets. And, to some extent, while never done with equality of access, this had some evidentiary truth. However, in a time when the public taxpayer has had to pick up the tab for the anonymous greed of the bankers who control the utility of exchange with monopolistic insolence, the simultaneous reliance on plastic and e-commerce together with the ever restrictive fee based behavior of the banks is unacceptable. And don’t think for a moment that the recent financial regulatory oversight transiting the lobbyist oiled halls of Congress has improved the situation in the least. To the contrary, Congress has strengthened the monopoly stranglehold and has insured market hegemony for those who have earned no respect from what once was community.
Today it is time to change. We need to reconnect with the roots of impulses which acknowledged that trust is built on accountability and community. Whenever and wherever we can, we need to regain our willingness to participate in transactions of trust. You think you can wait for someone else to figure out this systemic failure? Think again. While I was in Papua New Guinea three weeks ago, I saw a community exchange cultural tambu (strings of shells) which have been transacted for over 20,000 years and, in the process, I saw tons of produce move between two communities. At the exact same time, a thunderstorm in Charlottesville took out power to most of the city and, for three days, most stores and businesses ceased to operate because the electronic payment and communication system failed. You tell me, which system works? You tell me, which system allows for equal access? The bottom line is simple. We’ve been blindly led into a system that enriches the fewest in history at the expense of all. Enough!
So your challenge this week is to actually do something that creates value for another and accept nothing but a promise of a future return from the beneficiary. See if you can. Most of you who read this will view my recommendation as a nostalgic utopian illusion. However I’m recommending this for a very good reason. Over the past several months, the U.S. and European governments have been vastly expanding the deployment of electromagnetic pulse (EMP) shielding in defense and communications installations. If our governments – once allegedly of, for, and by the people – are now protecting themselves from electromagnetic radiation (which could come from a detonation of a high altitude nuclear device or a burst of electromagnetism) – it means that our e-commerce system is on a collision course with a nefarious outcome. So we MUST learn how to operate now in a manner that shows that we the people will not be victims of the insanity of those who perceive they control power. Get practice now and, in so doing, you may be part of the humanity that actually creates a more honorable, humane system. At worst, you’ll start building trust and community.