Posts Tagged ‘money’
“Wealth does not consist in money or in gold and silver, but in what money purchases”*…
For millennia, simple forms of record-keeping have been used as ways to keep track of debt, to substitute for the contemporaneous conveyance of specie, or to accommodate the future settlement and netting of debts. In England, tally sticks were regularly used. From Paolo Zannoni, an excerpt from his book, Money and Promises, via Richard Vague and his invaluable Delancey Place…
A tally is usually a stick, or a bone, or a piece of ivory — some kind of artefact — that is used to record information. Palaeolithic tallies include the Lembombo bone, found in the Lembombo Mountains in southern Africa, reported to date from around 44,000 BC; the Ishango bone, which consists of the fibula of a baboon, from the Democratic Republic of the Congo (the former Belgian Congo), thought to be 20,000 years old; and the so-called Wolf bone, discovered in Czechoslovakia during excavations at Vestonice, Moravia, in the 1930s, and estimated to be around 30,000 years old. Marked with notches and symbols, these tallies are ancient recording devices, means of data storage and communication. Not merely artefacts, they are important historical documents.
In England, from around the twelfth century, and for over 600 years, tallies became important financial instruments, a key part of public finance and an answer to a perennial problem for money-lenders, merchants and those involved in commerce and trade: how to both facilitate and record the exchange of goods, services and commodities. Reading these English tallies, understanding their history and their changing use, provides us with an understanding not only of the nature of individual financial transactions during the late medieval and early modern period, but also of the development of banking practices in England and its relationship to the English state.
Usually made of willow or hazelwood, tallies were used to record the key information of a financial exchange. The name of the parties involved, the specific trade and the date were written on each side of a stick. Notches of different sizes — which stood for pounds, shillings, and pence — were also cut on both sides. Then the stick was split in two along its length, creating a unique jagged edge; only those two pieces could ever fit perfectly together again. When someone presented one side as proof of a transaction, the parties could check for the right fit.
The potential uses for such a simple tool are obvious.
To begin with: an example of the early use of tallies as a record of debt repayment. John D’Abernon was the Sheriff of Surrey. His portrait in brass, in Stoke D’Abernon Church, Cobham, shows him as a knight in full armour, wielding a broadsword.
When he died, D’Abernon left his title, possessions and debts to his son, also named John. In 1293, we know that John D’Abernon gave two pounds and ten shillings to the Exchequer to pay a fine on behalf of his father. How do we know? Because at the time of payment, the official tally cutter made a series of notches on a stick: two cuts for the two pounds and one smaller notch for the ten shillings. The stick was then split, with the longer end going to John, and the shorter end staying with the Exchequer. The following words were inscribed on both sides: ‘From John D’Abernon for his father’s fine’ and ‘XXI year of the King Edward’.
John could thus prove to anyone that he had paid the fine of his father — simple and convenient.
Tallies also enabled the functioning of the tax system in medieval England, which was a rather more complex affair. The process took months to complete. It worked roughly like this. Tax receivers collected
revenues from the King’s subjects at Easter. They then passed them on to the Exchequer, which completed an audit in late September or early October. At the time, the Exchequer had two branches: the Lower and the Higher. The Lower Exchequer received and disbursed the revenues. The Higher Exchequer audited the process. They used tallies to track who had paid whom. As soon as the Lower Exchequer received the revenues, the tally cutter recorded the payment on the tally and split the stick. The tax receiver — the debtor — got the longer part, called the ‘stock’. The Exchequer — the creditor — kept the short end of the stick, called the ‘foil’. And once a year, at Michaelmas, the Higher Exchequer audited the whole process by matching stocks and foils. The stock was the proof that the collector had not merely pocketed the tax revenues.Over time, both the use and appearance of the tallies began to change: in the early years, tallies were 3 to 5 inches long; later, they grew to be 1 to 2 feet long, and sometimes much longer. More money meant more notches; more notches, in turn, required longer sticks. One of the last issues of tallies made by the English Exchequer was in 1729, for £50,000: the tally is a whopping 8 feet, 5 inches long, visible proof of the growth of public spending, taxation and inflation.
As the appearance of the tallies changed, so too did their uses. Inside the Exchequer, they served as receipts for money paid by taxpayers. Outside the Exchequer, they began to be put to entirely different purposes.
The business of the Exchequer simply could not work without the tally sticks. They were essential for auditing and controlling public finances, which obviously made them excellent collateral for a loan.
The tally was not a mere generic promise to pay, but a strong, unique claim on the proceeds of the Exchequer’s revenue stream. It identified the cashflow and the individual in charge of paying; the creditor gave the stock to the indicated tax receiver to get coins from a specific revenue stream, and a lender was sure to get his coins sooner or later. The humble English tally stick was therefore ripe to become a veritable public debt security, not merely a receipt. They functioned just like paper public debt securities, except instead of being written on paper, the transactions were instantiated and inscribed on sticks.
To take an early example: Richard de la Pole was a merchant who traded wool, wine and corn with France and central Europe in the early 1300s. He had a reputation for using debts aggressively to grow his business, which appealed to King Edward III and his advisors, who thought they might be able to make use of his skills. So, they appointed him Royal Butler. The job of butler was to supply all sorts of goods — food, wine and arms — to the royal household and to the army. We know that in 1328 Richard bought some wine from the French. As a good businessman, as Royal Butler, did he pay for the wine in coins? He did not. Rather, in order to pay the bill, the Lower Exchequer cut eight tallies, which were addressed to the collectors of taxes for West Riding in Yorkshire, listing the tax revenues earmarked to settle the debt. The Lower Exchequer gave the foils — one half of all the eight tallies — to Richard, who handed them to the merchants who sold him the wine. The merchants then exchanged the tallies with coins from the taxes paid in West Riding, and finally, a few months later, the Higher Exchequer called upon the tax receivers to account for the shortfall of cash, whereupon they presented the eight foils, which had been first given to Richard, as proof of the payments made.
To be clear: unlike coins, tallies did not actually settle debt. By accepting a foil, a vendor was effectively agreeing to a delayed payment from the Exchequer; the tally was a kind of guarantee that they would get coins. For the state, meanwhile, the tally was a convenient way to borrow from its suppliers, or a form of what we would now call vendor financing — the citizens and merchants who sold goods and services for tallies were effectively financing the state, in much the same way as those who lent actual coins to the Exchequer…
How record-keeping became finance: “Tally Sticks for Money,” via @delanceyplace.
Having looked back, we’d do well to heed Jack Weatherford‘s admonition (in his 1997 book The History of Money):
As money grows in importance, a new struggle is beginning for the control of it in the coming century. We are likely to see a prolonged era of competition during which many kinds of money will appear, proliferate, and disappear in rapidly crashing waves. In the quest to control the new money, many contenders are struggling to become the primary money institution of the new era…
* Adam Smith
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As we contemplate currency, we might recall that it was on this date in 1888 that William Seward Burroughs of St. Louis, Missouri, received patents on four adding machine applications (No. 388,116-388,119), the first U.S. patents for a “Calculating-Machine” that the inventor would continue to improve and successfully market– largely to businesses and financial institutions. The American Arithmometer Corporation of St. Louis, later renamed The Burroughs Corporation, became– with IBM, Sperry, NCR, Honeywell, and others– a major force in the development of computers. Burroughs also gifted the world his grandson, Beat icon William S. Burroughs.

“Before beginning, plan carefully”*…

The marvelous Matt Levine on one of the vexing challenges facing those who preserve themselves cryogenically…
See, if you go to a regular trusts and estates lawyer, she will ask you questions like “if your spouse and children die before you, whom do you want to inherit your estate,” but if you go to a science fiction trusts and estates lawyer, she will ask you questions like “if your frozen head cannot be attached to a fresh body and reanimated in 200 years, but your consciousness can be cloned in a computer simulation, would you like your estate to go to the cloned consciousness or stay with the frozen head?” Meanwhile I suppose if you go to a regular financial planner, he will ask you questions like “how much equity risk are you comfortable taking between now and retirement,” while if you go to a science fiction financial planner, he will ask you questions like “where are you most comfortable investing for the next 200 years, given that you will not be able to change your asset allocation decisions during that time, because you’ll be dead?”
When you are a kid, science fiction is fun because it imagines amazing futuristic technologies. And then you grow up and you realize that what’s really fun are the legal and financial technologies that are called into being by those physical technologies: Sure sure sure reviving a frozen head is great, but how does the frozen head get a credit card? Bloomberg’s Erin Schilling reports:
Estate attorneys are creating trusts aimed at extending wealth until people who get cryonically preserved can be revived, even if it’s hundreds of years later. These revival trusts are an emerging area of law built on a tower of assumptions. Still, they’re being taken seriously enough to attract true believers and merit discussion at industry conferences.
“The idea of cryopreservation has gone from crackpot to merely eccentric,” said Mark House, an estate lawyer who works with Scottsdale, Ariz.-based Alcor Life Extension Foundation, the world’s largest cryonics facility with 1,400 members and about 230 people already frozen. “Now that it’s eccentric, it’s kind of in vogue to be interested in it.”
He and others are trying to answer questions that at times seem more like prompts in a philosophy class.
Can money live indefinitely?
Are you dead if your body is cryonically preserved?
Are you considered revived if you have only your brain?
And if you’re revived, are you the same person?
So many good legal questions — “House considers the revived person to be different in the eyes of the law, in part because a person can’t be the beneficiary of their own trusts” — but also great financial ones.
Here’s one: Should you buy Bitcoin for your long sleep? The argument for Bitcoin is that you can hold it, indefinitely, without relying on anyone else: If you put 10 Bitcoin in a wallet and only you know the private key, and then you die and get frozen and come back in 200 years, no one will have taken your Bitcoin, legal rules about inheritance and perpetual trusts don’t matter, and you don’t need some succession plan for the trustees and financial advisers who will take care of your assets. You just have to make sure you remember your private key as you’re dying. Legal rules can change, human institutions can change, but your Bitcoin is immutable.
The argument against Bitcoin is, of course, what if people stop valuing Bitcoin? Putting your money in Bitcoin is a hedge against change in other human institutions, but it puts a lot of eggs in the basket of one human institution, “treating Bitcoin as money.” It’s a bit weird to bet that that’s more permanent than anything else.
More generally, what is money anyway? “It may be difficult to know what role money will play in a post-[artificial general intelligence] world,” says OpenAI to its investors, and what if OpenAI gets to artificial general intelligence before anyone gets around to unfreezing the heads? You might be leaving your future self all the wrong stuff…
Very long-term planning: “Cryogenics Law,” from @matt_levine via Ingrid Burrington’s wonderful newsletter, “Perfect Sentences” (in this instance, “Sure sure sure reviving a frozen head is great, but how does the frozen head get a credit card?).
* Marcus Tullius Cicero
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As we chill, we might recall that it was on this date in 1983 that the coldest (natural) temperature ever recorded on Earth was registered by the research station at Vostok, Antarctica: -128.5 degrees Fahrenheit (-89.2 degrees Celsius).

We might also note that today– July 20, 2024– is the date on which the action in Octavia Butler’s Parable of the Sower begins: “…in 2024, when society in the United States has grown unstable due to climate change, growing wealth inequality, and corporate greed…”
“A greenback, greenback dollar bill / Just a little piece of paper, coated with chlorophyll”*…
Americans are increasingly going cashless. Still, as Marcus Lu illustrates, there’s rather a lot of currency in circulation– almost $2.3 Trillion (of which about a third, an estimated $950 Billion [and here] is outside the U.S.)…
Every year, the U.S. Federal Reserve submits a print order for U.S. currency to the Treasury Department’s Bureau of Engraving and Printing (BEP). The BEP will then print billions of notes in various denominations, from $1 bills to $100 bills.
In this graphic, we’ve used the latest Federal Reserve data to visualize the approximate number of bills for each denomination globally, as of Dec. 31, 2022…
“Visualizing All of the U.S. Currency in Circulation” from @VisualCap.
* Ray Charles, “Greenbacks”
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As we concede that cash is still king, we might send penurious birthday greetings to Kenneth Rogoff; he was born on this date in 1953. An economist who teaches at Harvard and has served as the Chief Economist of the International Monetary Fund, he has been a vocal champion of austerity… thus in conflict with Nobel Laueate and former chief economist of the World Bank Joseph Stiglitz (and radically less consequentially, with your correspondent).
While Rogoff completed his education (at Princeton and MIT), he dropped out of high school at 16 to concentrate on chess (at which time he met Bobby Fischer, who was impressed by Rogoff’s “self-assured style and his knowing exactly what he wanted over the chessboard”). Two years later he returned to school but continued to play competitively. Indeed, In 2012 he drew a blitz game with the world’s highest rated player Magnus Carlsen.
“Follow the money”*…
Professor and author Dave Karpf is re-reading the entire WIRED back catalog chronologically (for the second time) for a book project on the “history of the digital future.” A consideration of a 2000 issue devoted to the future has led him to a fascinating insight…
The January 2000 issue is themed around predictions. The magazine did the same thing in January 1999. They ask a ton of experts and celebrities to talk about what the future is going to be like. Some take it seriously, others make jokes. Some are prescient, others notsomuch. It’s a window into what the future looked like back then.
[Karpf reviews a number of the predictions, concluding with…]
…And then there’s this perfect Nathan Myrvhold quote “There won’t be TV per se in three decades. There will be video service over the Internet, but it will be as different from TV today as, say, MTV from the Milton Berle show of the 1950s or from radio plays of the 1940s.”
This is art. I want to frame Myrvhold’s quote and put it in a museum of lopsided tech futurist predictions.
The part that he gets right is the technological development curve. There he is, at the turn of the millennium, five years before the inception of YouTube, telling us that the future of television is going to be video service over the Internet. Yes, absolutely right!
But the part he gets wrong is the industrial, social, and economic impacts of this technological development. We’re seeing this right now, in 2023, as the various streaming services add advertising and strike content-sharing partnership deals with each other. We have these revolutionary new technological developments, and, for about a decade, they were supported by a stock market bonanza. But now that the stocks are no longer ridiculously overvalued, the companies driving these technological developments have settled on a vision of replacing old cable tv with new cable tv. (I wrote about this in July 2022, btw, back when this Substack had a much smaller readership. I think the piece holds up well.)
Technologically, it didn’t have to be this way. But, given all the existing incentive structures established by 21st century capitalism, it was all-but-certain that we would end up here.
I see this time and time again when reading predictions of social transformation from 90s- and 00s-era technologists [cough NicholasNegropontewasconstantlywrong cough]. And I see the same thing today, every time an artificial general intelligence true believer starts opining on the glorious future of education/entertainment/science/manufacturing/art.
I wrote about this phenomenon last year in The Atlantic, where I argued that we won’t be able to tell what the future of AI looks like until we have a sense of where the revenue streams come from. The trajectory of any emerging technology bends towards money.
…
I’m writing a whole book about the lopsided ways in which tech futurists always get their predictions wrong. And one major reason why is that they focus on what the technology could do, given time and mass adoption, rather than considering what capitalism will surely do to those technologies, unless we alter the incentives through regulations.
The trajectory of every emerging technology bends toward revenue streams. If you want to build a better future, you cannot ignore the shaping force of money…
A peek back at some tech predictions from January 2000: “From the WIRED archives: The trajectory of any emerging technology bends toward money,” by @davekarpf (referral account)
See also “The frantic battle over OpenAI shows that money triumphs in the end” (in which Robert Reich argues that, though the revenue streams aren’t yet obvious, protecting their emergence was at the core of the recent battle for control of what was, ostensibly, a not-for-profit) and the oddly apposite “Nerd culture is murdering intellectuals.”
And for more on Karpf’s march through WIRED’s history and what it can tell us about the ways that tech and our culture have changed, see “Notes from #WIRED30.”
* Deep Throat (as portrayed the film adaptation of All the President’s Men)
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As we pay attention to the profit motive, we might recall that this is an important date in broadcast history. On this date in 1896, Guglielmo Marconi introduced “radio”: he amazed a group at Toynbee Hall in East London with a demonstration of wireless communication across a room. Every time Marconi hit a key beside him at the podium, a bell would ring from a box being carried around the room by William Henry Preece.
Then exactly five years later, on this date in 1901, Marconi confounded those who believed that the curvature of the earth would limit the effective range of radio waves when he broadcast a signal from Cornwall, England to Newfoundland, Canada– over 2,100 miles– and in so doing, demonstrated the viability of worldwide wireless communication.
In the earliest days of radio, when it was essentially a wireless telegraph, there were myriad predictions of what the technology might become– from an internet-like decentralized community of communicators to a provider of education, telemedicine, and other special services… in the event, of course, it followed the money.
“The best way to destroy the capitalist system is to debauch the currency”*…
… the capitalist system or for that matter, just about any economic system. So the keepers of those systems, the 169 authorities that issue money around the world, take that threat very seriously. About half of them depend on one company, De La Rue. As Samanth Subramanian explains, the pandemic has been a roller coaster ride for cash– and thus for De La Rue…
… De La Rue… is in the high-stakes business of authentication. It designs and prints national passports, as well as the silver foil labels that mark cigarette packs and alcohol bottles as genuine. Most crucially, it works with roughly half of the world’s central banks on their currency notes: designing them, developing security features to protect them from counterfeiting, and printing them. From its presses in Asia and Europe, De La Rue turns out up to 6 billion banknotes a year, making it the world’s largest commercial printer of currency.
That number is only a fraction of all the notes printed worldwide annually. The biggest central banks—such as those of the US, China, India, and Brazil—tend to have their own presses. Still, many smaller countries outsource their production of money. De La Rue prints British pounds, Fijian and Barbadian dollars, Qatari riyals, Sri Lankan rupees, and dozens more currencies…
[There follows a fascinating history of the company…]
… A major issuer like the Bank of England will place a currency order annually; smaller banks can order once every few years. But the past is not always a reliable guide. During times of inflation, for instance, the demand for notes grows. De La Rue is one of the few companies for which inflation—or, for that matter, regime change—is a good thing. The fall of Saddam Hussein warranted new notes; so did the creation of South Sudan.
Most countries are better prepared for more predictable cycles of cash use. Around the Middle East, central banks arrange to have more currency on hand before Eid al-Fitr, when it’s customary not only to spend money on festivities but also to hand out gifts of crisp new notes. The same goes for the Chinese New Year and Christmas.
The pandemic proved to be unexpectedly disruptive. A casual observer may have expected cash use to plunge in 2020, as people stayed home during lockdowns and worried about catching the virus from banknotes. In fact, disasters tend to drive people toward cash, as a physical store of safety and wealth. As a result, in most countries, the average value of notes drawn from ATMs went up by about 25-30%. Central banks also wanted new, cleaner notes, and larger stocks of notes in general, so they ordered more.
Across the US and Eurozone, total currency in circulation in September 2020 was more than 10% higher than the previous year. In the US, the number of notes circulating usually tends to rise by an annual 1-2 billion. In 2020, that figure surged to 6 billion.
De La Rue welcomed the bonanza. It had suffered a setback in 2019, when it failed to win a £490 million contract to print the new, post-Brexit British passport. (Ironically, the job went to an EU company). But after the pandemic glut of orders for new notes, demand sank to lower-than-normal levels between 2021 and 2022. The currency division’s revenues fell 2.1%, to £280.9 million. The chair of De La Rue’s board resigned in April 2023 after the company put out a profit warning—its third in a year (a new chair was appointed in May). For De La Rue, the hangover from the pandemic has been more challenging than the pandemic itself…
The world’s largest money printer made bank during the pandemic: “De La Rue: Currency printer to the world,” from @samanth_s in @qz.
* Vladimir Lenin
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As we muse on money, we might recall that it was on this date in 1939 that The Wizard of Oz was first shown to the public in Dennis, MA, one of three test screenings ahead of the official release. Fearing the film would be unpopular, MGM executives opted to gauge audience reaction. The film was of course well received, and the studio proceeded with the star-studded Hollywood premier at Grauman’s Chinese Theater (on August 15).
And on the subject of currency, it’s worth noting that many view Dorothy’s trek to the Emerald City to be a lightly-veiled critique of the Gold Standard…







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