Book review by Wendy Grossman: Cloudmoney

Three years ago, the area around the local tube station included a bank and four ATMs. Come the pandemic, the bank closed, never to return, and so did two of the ATMs. The loss of the bank gave a couple of the chain stores an excuse to refuse to take cash. But they’re a minority in an area full of independent local shops, who recognize that many of their customers are cash users. Journey into some parts of central London, however, and cash gets you ghosted.

We are told that the cashless future is what we want: it’s more convenient (except when the system is down, the app needs to be rebooted, or there’s no Internet connection). The reality, as “monetary anthropologist” and former broker Brett Scott points out in his book Cloudmoney, is that despite this inevitability narrative, one reason electronic/digital payments are more convenient is a deliberate effort to make cash harder to access. Often, promoters claim the cashless society is – or will be – more financially inclusive. Yet, as Scott recounts, that “inclusion” in the remote global economy often brings with it the exclusion of locally-controlled, less formal economies. Less financial inclusion, more *enclosure* and “corporate seep”.

Scott’s central thesis is simple: once the forces of Big Tech and Big Finance have merged, they will have a hitherto unimaginable amount of power over all of us. I have some sympathy with this argument. People forget that it was through the banks that Gilead was brought into being in Margaret Atwood’s The Handmaid’s Tale. All they had to do was locate all the accounts tagged “F” and turn off access until a suitable male came forward to claim them. This is the power of cloudmoney – money that exists for us only in the form of numbers that represent promises to pay. Scott is not predicting a specific dystopia; but he does want to propagate a counterbalancing narrative to the “liberation” every new fintech app pretends to promise while scarfing up all our personal data. In his campaign to protect the public system of cash, he sometimes finds himself in the company of conspiracy theorists whose other ideas he rejects.

What is less clear is where bitcoin and other cryptocurrencies fit in. They also started with rhetoric: they were digital cash, digital gold, a mechanism for bypassing the world’s banks and governments. In practice, so far, they haven’t succeeded at any of these things, and even in El Salvador, where bitcoin is legal tender, you can’t use it to buy a box of oatmeal in a supermarket.

The story technology companies tell is, of course, that they are disrupting the stodgy, antiquated world of traditional finance. Instead, what Scott sees is plain old automation that serves that world and tightens its control. Almost every new service, whatever the rhetoric it starts with, from credit cards to Paypal to Apple Pay to Facebook’s failed Libra cryptocurrency, becomes a front end for bank accounts for the same reason that robbers always focused on them: that’s where the money is. The exception is cash – slow, partially disconnected cash that enables transactions that aren’t caught in what Scott calls the “digital mesh” of corporate capitalism. No wonder they hate it.