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« Really filthy lucre | Main | Security matters, but why? »

Born on the 4th of July

By Dave Birch posted Jul 4 2009 at 6:43 PM

[Dave Birch] Appropriately for today I'm reading Jason Goodwin's Greenback. It reminds me just how much the birth of America and the birth of modern money (ie, paper) are intertwined. Regarding the most famous document of 1776, he says

There is a niggling list of grievances right at the beginning of the Declaration of Independence which seemed, at the time, crucially important, though few people nowadays read or remember these. The first two blame parliament for ignoring laws passed by colonial assemblies, and what they actually mean is: we agreed to have paper money, and you simply shut us down.

Remember Patrick Henry's impassioned denunciation of King George as a tyrant? It was about paper money, the latest in the series of experiments -- starting with wampum -- that helped America to develop as an economy in its own right, despite the British mercantilism prevalent at the time. In Britain, money was about custom and generations of practice, implicit in the structures of society. In America, money was invented: a creature of the law, whether seashells, tobacco or paper. As Goodwin so nicely puts it

Paper money cost nothing to produce; it was just a promise, like America.

The story of the United States' experiments with money is absorbing and, I feel, still laden with meaning for today. As I wrote earlier in the year

Why should we ponder these colonial experiments? Well, I think that since the entry level barriers to virtual financial businesses are very low, we might expect to see monetary experimentation on par with the young United States and it’s therefore quite likely that the most revolutionary impact of digital money might come from its ability to create new stores of value rather than its ability to act as a more convenient means of exchange.

[From kashklash:: exchanging the future » Blog Archive » Super powers]

I'm writing at a time when the state of California is issuing IOUs. (Not so much "In God We Trust" as "I'll Be Back"). These IOUs are currently being accepted at par by Bank of America, I can't help feeling that the experiments are about to begin in earnest.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]


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