“The moment I cross the threshold of a bank and attempt to transact business there, I become an irresponsible idiot.” So confides the rattled narrator of Stephen Leacock’s little bit of whimsy My Financial Career .
Readers of the story will recall that the sight of the bank’s accountant – “a tall, cool devil” with a “sepulchral” voice – so unsettles the client that he asks to see the bank manager – alone.
This arouses suspicion that he is a Pinkertons operative. When it transpires that he merely wants to take out $6, the banker turns so cold that the man is unnerved yet again and writes $56 on the slip, draining his account.
“An idiot hope struck me that they might think something had insulted me …,” he tells us. “I made a wretched attempt to look like a man with a fearfully quick temper.”
Nobody is fooled; he’s just another punter put off his stroke by dealing with money and its institutions. Nowadays, of course, you needn’t enter any bricks-and-mortar edifice, or deal with humans at all, to execute your banking needs. But the costs of our spectral economy – from online banking and digital stock trading to virtual currencies such as Bitcoin, the anonymous, peer-to-peer payment system now in the news – may outstrip the benefits, at least when it comes to understanding what’s going on.
On the opening page of Das Kapital , Marx remarks that a commodity is “a very queer thing, abounding in metaphysical subtleties and theological niceties.” He was not the first to recognize that a “commodity” is not a thing, but a relationship. Once in a system of monetized production and consumption, an object (Marx’s example is a table) acquires – or loses – value in a way almost entirely unhinged from its material reality. A commodity doesn’t even need to retain material reality. The metaphysical subtleties do not end there.
Marx would hasten to add, correctly, that “money” is not another word for value, but for trust. Because the price of a commodity is just a matter of what a market will bear, the currency used to make a transaction is a matter of pure convention. Paper will do as well as coins, playing cards as well as pound notes, and binary data sequences as well as numbers pencilled into a ledger.
These facts should never be far from view, but it is a pertinent aspect of the human character that we tend to relapse into crude materialism at just those moments when we should remember how finely spun is the web of the world of money. The market’s most recent swings, with Bitcoin bubbling and gold crashing, simply remind us that value, in this context, is a matter of collective delusion. Necessary delusion, but delusion all the same.
Gold going bearish was arguably more rattling than the speculation on Bitcoin. The latter is, after all, just the most technically clever of the many alternative currencies on offer. Most take the form of either community chests, one step up from barter systems (Calgary Dollars or Toronto Dollars), or libertarian tax-evasion mechanisms (Liberty Dollars). Some, such as Second Life’s Linden Dollars, are just as virtual as Bitcoin.
It’s true that many libertarians jumped on the Bitcoin wagon, some viewing it as the first step in their political champion Ron Paul’s alternative future of competing non-governmental currencies, others looking for a haven from what looks, still, like the imminent collapse of the euro, if not the greenback. Critics have retorted that Bitcoin is no more than a cyberpunk update on the Ponzi scheme, liable to collapse sooner or later into so much valueless electronic pelf.
Some of those same libertarians are among the gold bugs who have watched in dismay as the once rock-solid metal has gone into free fall. Ever since the U.S. dollar was taken off the gold standard in 1933, it has seemed as if national currencies were as variable as weather. Who can forget those images of German workers carting huge piles of inflated deutsche marks around and film clips of treasury presses printing sheet after sheet of dollars?