‘Before Babylon, Beyond Bitcoin’
David Birch, London Publishing Partnership, 264 pages, $22.50.
People use money every day and yet struggle to understand it. The economic experiment known as monetarism — limiting the supply of money in order to control inflation — was abandoned when it became clear that it was impossible to establish a precise definition of the money supply. “Before Babylon, Beyond Bitcoin” by David Birch offers a broad historical overview on the nature of this essential economic instrument. His underlying thesis is that money has evolved over the ages to suit the needs of society and the economy. Money may be about to change again. The author said he thinks cash will and should dwindle away. The future belongs, not to plastic cards, but to mobile phones. In Kenya, hundreds of businesses, including the leading utilities, accept payments through a mobile-based system. More than two-thirds of adults use it. With Uber and supermarkets, there may never be a “transaction” in the future. A reader could record details and then charge your account. All this is plausible. The question is who will control this electronic money. The author thinks that communities rather than countries will be the natural currency issuers in the future. These communities could be based on cities or on affinity groups such as a shared religion. All these competing currencies would have different values. However, figuring out which currencies are liquid and which are not, all happening while central banks cede power, might make the radical thinking less plausible.