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Dead medium: Metal Money
From: julian@mostly.com (Julian Dibbell)

Source(s): *Frozen Desire: The Meaning of Money* by James Buchan (Farrar Straus Giroux, New York, 1977) *The History of Money: The Struggle Over Money from Sandstone to Cyberspace* by Jack Weatherford (Crown: New York, 1997)

Precious Metal As a Network Protocol

by Julian Dibbell

James Buchan, on page 18 of his remarkable *Frozen Desire: The Meaning of Money* writes this:

"From our vantage, we can see that money is of no particular substance and may be of no substance at all; that whatever money is, it may be embodied in coins or shells, knives, salt, axes, skins, iron, rice, mahogany, tobacco, cases of gin; in persons; in a word or gesture, paper, plastic, electronic impulses or the silver ingots raced through the streets on trays at sundown to make up accounts between the foreign banks in my mother's father's days in Hangkow."

Two things about this passage interest me. The first is its suggestive implication that money has both a "hardware" component (i.e., the coins, paper, knives, mahogany, etc., that embody it) and a "software" component (i.e., among other things perhaps, the value thus embodied). The second is the wonderfully nostalgic closing tidbit about the shuttling trays of silver in the streets of old Hangkow (this I assume is the former city Hankou, China, now a subdistrict of the megalopolis Wuhan), which provides a vivid, high-Cahill-number image of the essentially abstract dead medium I'm proposing for consideration here: metallic monetary standards, the antiquated practice of backing every piece of circulating currency with a fixed amount of precious metal.

Some preliminary taxonomizing is in order. Bruce Sterling suggested in Note 22.1 that money might be thought of as a distributed calculating system, and that seems about right. But there's another suggestion built into that one: that we think of money as a network. Strictly speaking, too, we'd want to think of it as an *inter*network, globally distributed and capable of transmitting value from one end of the net to the other, so long as the proper network gateways are traversed. Money, we might even say, throwing precision to the wind, is the original Internet. But let's just call it an analogy, and see where it leads us.

One implication, I think, is that if coins and banknotes and so on are to be thought of as the hardware of the network, then we must also look for some underlying technical system we could call the network protocols. I am not enough of a finance wonk to identify the "protocols" of the contemporary world money system == a frighteningly live medium, in any case == but I think it's safe to say that in the terms of our analogy, "protocols" is exactly what we would have to call the metallic standards that governed monetary exchange during the first great age of global capitalism (i.e., from Waterloo till the First World War).

In particular, we would mean the gold standard, which died a slow death between 1931, when Great Britain abandoned it, and 1971, when Britain's successor at the helm of world finance, the U.S., finally chucked it too.

If I understand the Hangkow ingot exchange Buchan alludes to, that system might properly be considered a kind of monetary intranet, operating locally on the same principles as the global network. Globally, a physical transfer of precious metal was also used to settle accounts at the end of the day == though at that level the metal was gold rather than silver, and the transfers were between nations as well as banks, and the end of the day was really the end of the quarter or the year.

It was a very different regime than what we have now, with very different effects. The money supply was tighter, often painfully so, and the drift of economies was (according to Buchan) deflationary rather than inflationary. In the U.S. at least, bitter and arcane controversy sometimes surrounded the subject of metallic standards, with the Populists of the late 1800s, for instance, supporting a move to a "bimetallist" gold-and- silver standard that would somehow loosen the money supply and make things easier for the little people.

According to Jack Weatherford's *The History of Money: The Struggle Over Money from Sandstone to Cyberspace*, it was apparently well-understood at the time that L. Frank Baum's *The Wizard of Oz,* published in 1900, was a Populist allegory inveighing against the gold standard (the seductive "yellow brick road" to the sham- world of Oz being merely one of the more obvious clues).

Metal-based money was strange stuff. It's difficult, at this late stage in the world-financial game, to imagine what could possibly bring the metallic standards back. Profound inflationary trauma perhaps; or maybe a global dictatorship. For the time being, at any rate, they remain very much dead.

Julian Dibbell (julian@mostly.com)