It is the business of the future to be dangerous
Which is why we need artists, not technologists, to help us predict the future of money
I like looking at old predictions about the future not simply because some are wrong and hilarious, some are right and scary (after all, as the philosopher Alfred North Whitehead wrote back in 1925, it is the business of the future to be dangerous), but because trying to understand why they are right and why they are wrong is a way to improve our own futurology. Understanding the mistakes helps me to refine my own projections. Yes, we didn’t get an orbiting Howard Johnson’s in 2001, in other words, but why was it predicted in the first place? And why did the prediction turn out to be wrong?
This why I am an aficionado of paleo-futurology, the study of what people used to think about the future, and in particular the future of money.
I can illustrate this with an extract from one of the the first blog posts I ever wrote. It was originally published on the Tomorrow’s Transactions blog at Consult Hyperion on 1st March 2006 and was eventually re-written and expanded into a subsection for my book “Before Babylon, Beyond Bitcoin”. I was reminded of it recently because of a tweet from Mike Chambers and I thought that since it’s now 15 years (!!!) since I first wrote, it would be a fun introduction to a bigger point about the kind of scenario planning and strategy work that I get involved in with various organisations.
I’m very interested in the history of money and payments. I have looked at the evolution of the payments card business in some detail, because I can’t help but feel that an understanding of how it got to where it is should provide some insight into where it is going next. But I am also interested in the history of what people thought about that future. Hence I am always on the lookout for old references to non-cash retail payments. In this context, I came across the what I think first reference to the credit card in world literature. It is in a long-forgotten text from 1886 called “Looking Backward, 2000-1887” by one Edward Bellamy. I picked up a 1947 edition from the Amazon marketplace, which suggests it must have been reprinted a few times. Indeed, the dust jacket claims it to be one of the best selling utopian fantasies of all time.
It’s a fairly standard “guy falls asleep under hypnosis and awakes 114 years later to find a model society, then finds it’s all a dream” kind of book. It’s difficult to read with modern eyes, because the perfect society that Bellamy imagines is a communist superstate that looks like Disneyland run by Kim Jong-un. The central conceit is “the industrial corps”. Everyone is drafted into the army, essentially, but the army runs the factories instead of fighting wars. Since everyone works for the government, and since government planners can optimise production, all of the “inefficiency” of the free market can be removed.
(If I accidentally put this book next to my copy of Hayek’s “The Road to Serfdom” , I imagine the tomes would immediately be annihilated in a burst of pure energy.)
The book has special place in my canon because the time-traveller is told by his host, the good Doctor Leete (who has a daughter called Edith: E. Leete, geddit?), that there is no such thing as cash in the year 2000. Instead, he says, the populace use “credit cards”. He then goes on to describe what are in fact offline pre-authorised debit cards.
(This ruined the book for me as a payments nerd. It's as big a blunder to me as the highlanders wearing kilts were in Braveheart to, well, anyone really. If someone can run a web site complaining about typographical mistakes in movies, there must be an opportunity to create a version of Movie Mistakes called Money Mistakes.)
The way that Bellamy’s “credit cards” work is that an amount is taken from your account (there’s only one bank, of course, and that’s run by the government), and you are given a card that is good for that amount. Shops accept this card in payment: Dr. Leete explains how they are used at the point-of-sale (POS):
“The value of what I procure on this card is checked off by the clerk, who pricks out of these tiers of squares the price of what I order”.
That’s a pretty imaginative prediction a generation before the Western Union charge card. In fact, given that Bellamy failed to predict television, computers, airplanes and the knowledge economy, he makes a couple of other really insightful predictions about the evolution of money. When talking about an American going to visit Berlin, the future sage notes how convenient it is to use cards instead of foreign currency:
“An American credit card,” replied Dr. Lette, “is just as good as American gold used to be”.
He also reflects on the nature of the currency itself (anticipating the end of the Gold Standard and the post-Bretton Woods world) by saying that:
‘“You observe,” [Dr. Lette] pursued as I was curiously examining the piece of pasteboard he gave me, “that this card is issued for a certain number of dollars. We have kept the old word, but not the substance. The terms, as we use it, answers to no real thing, but merely serves as algebraical symbol for comparing the values of products with one another.”’
Writing at the height of the power of the Victorian gold standard, money as an “algebraical symbol for comparing the values of products” is an impressive leap and it must have seemed unsettling to the readers. A more unsettling question appears later in the book though, when Edward asks his 21st century host:
‘“Are credit cards issued to the women just as to the men?”
and is told
This is a wonderful example of how science fiction isn’t really about the future, but about the present: the retort “certainly” is clearly intended to surprise the Victorian reader as much as the glass tunnels that surround pavements when it rains and it is a much interesting and much more important prediction than the existence of off-line pre-authorised debit cards.
Predictions are hard, then, especially about the future. And especially, I might add, about the future of money. Along with my good friend Brett King, I am particularly interested in science fiction predictions such as Bellamy’s, predictions that tell us something important about the future of money, banking and finance. This is because I am convinced that for really radically visions of the future, you have to look at the work of artists rather than technologists. There are exceptions, of course, such as Arthur C. Clarke’s vision of geostationary satellites (a sector in which, by the way, I spent a significant portion of my early career in the world of secure communications) but even this might be seen as more of an informed extrapolation.
Exploring these visions, Brett and I gave a presentation on this at SIBOS (a sort of Burning Man but for bankers) in London in 2019 and we drew on a wide range of source material. One visionary that I was particularly interested in was Robert Heinlein. Like most teenagers of my generation and background, I devoured his albeit-a-touch-fascist masterpiece "Starship Troopers" ("Happiness consists in getting enough sleep. Just that”) and when in college "Stranger in a Strange Land" was in the canon alongside "The Illuminatus Trilogy” as well as, in the house I shared with two mathematicians and a biologist at least, “Godel, Escher, Bach”.
Heinlein, interestingly, more than once turned his imagination to the future of finance. In the “Door into Summer”, originally published in 1956, he introduces the idea of a “universal check book” that a person could use to withdraw cash from any branch of any bank because all of the banks were connected by a single “cybernet”. That’s pretty impressive, considering that computer networks were in their infancy and banks didn’t have this kind of interoperability in place until the mid-1980s.
(As an aside, when my colleagues and I founded the electronic transactions consultancy Consult Hyperion, one of our early projects was the Midland-NatWest-TSB ATM interoperability project, known as MINT, to allow customers to use their ATM cards in any ATM machines, and this didn’t got live until 1989 if memory serves.)
The point that Brett and I were making was not about technology. Artists often get this wrong, and why wouldn’t they? But the technology is the easy bit. Even I can imagine putting probes into monkey brains to play computer games. Heinlein, writing in the bright dawn of the Atomic Age, thought that the markings on his checks that would allow the machines to read them automatically would be radioactive, rather than boring magnetic tape. But so what? That wasn’t what his vision was about. In fact, as the wonderful web site Technovelgy notes, he wasn't the first person to think of applying computers to banking (which, in fact already existed at that point) but the idea of a network that would link them all together was something different and a real leap of the imagination.
The hard part, then, is not to imagine the technology but to imagine the impact of the technology. In Heinlein’s “Beyond This Horizon” where the government has an “integrated accumulator” (what we would now call a blockchain) to record all transactions and the finance minister has dashboard to see just how the economy is doing, the technology all works pretty much as it has done for years. But his integrated accumulator sounds very much like the “compubank” in Margaret Attwood’s “The Handmaid’s Tale” which tells what happens if this machinery falls under the influence of fanatics (in that case a US administration formed by theocratic fascists that bans and blocks women’s payment cards).
So if we take the aritficially-intelligent quantum blockchain in the cloud for granted, then what does it mean? A couple of generations from now will we be in the world of Star Wars with a “galactic credit” that is universally accepted? That doesn’t seem right to me. A single currency doesn’t really work between Germany and Greece, so how I can’t really see how it would work between Earth and LV-426. Would the use of a Synthetic Hegemonic Currency (SHC), to use Mark Carney’s words in the Financial Times function in these circumstances as a trade currency for the universe?
What about the world of Star Trek with no money at all, save the gold-pressed latinum of the Ferengi, valuable because it’s the only substance that the replicators can’t produce, just as Bitcoin is valuable because it is the only software that cannot be copied? How about the world of Charles Stross’ “Neptune’s Brood” where there is fast money and slow money that relies on cryptography so it only travels at one-third the speed of light?
Will cash itself be banned or will it simply become cash as envisaged by William Gibson in his “Count Zero” where the protagonist finds himself in a near future where he "had his cash money, but you couldn’t pay for food with that. It wasn’t actually illegal to have the stuff, it was just that no- body ever did anything legitimate with it”. (Which, frankly, sounds like Sweden now rather than some future barely-imagineble dystopia.)
What if money as we know it vanishes as a transactional medium of exchange? Will it be the world of Bruce Sterling’s “Distraction” in which distributed servers manage reputation as a currency, a theme also present in Cory Doctorow’s “Down and Out in the Magic Kingdom”. I am naturally attracted to these images of a future in which identity, trust and reputation reconnect us with our neolithic heritage (indeed, a few years ago I wrote a book called “Identity is the New Money”) and dispense with many kinds of intermediaries!
My point is that we should begin our scenario planning for these future environments now, so that regulators and legislators can be acclimatised well in advance, precisely because we need this context to ensure the best for society as a whole. We should not, however, leave this scenario planning to technologists or even to technologists working closely with regulators. If we want scenarios of real value that will help us to bound our strategic planning, we need to involve artists.