Now, I must confess, the intricacies of payments systems don't hold much fascination for me. Invariably, I find those involved in payments systems tend to view money as set of problems in need of a technological solution. This doesn't resonate with my view of Money as an aspect of reality (and unreality). Of the two books Christopher sent me F.P. Thomson's was very much in this 'technological' vein. It's a technical manual of Giro payment systems. However, Glyn Davies's was different.
As you may know, Glyn Davies wrote A History of Money - probably the best orthodox history of money around. In his Giro book, Davies gives us not only a detailed account of the Giro in Britain in the 60's and very early 70's, but also the history of the previous failed attempts to establish it. He points out how important the Giro was in other countries and traces its origins back ancient Egypt 3500 years ago. The word Giro, he tells us, comes from the Greek 'Guros' meaning ring or circle. He even gives Gyges - of whom I make much of elsewhere on this blog - a name-check as the inventor of coinage.
Aside from placing the Giro in historical context, what Davies does is to put the more recent attempts to establish it in Britain in a political context. Here, he exposes the political dynamics underlying, what Davies sees as, the frustratingly long gestation and difficult birth of the British Giro. Of course, the successful, efficient and cost-effective administration of a Giro system is dependent on the level of technology that underpins it. And the Giro was finally realized in the white heat of Wilson's technological revolution. But, and this is the central thrust of Davies' book, the key dynamics both preventing and encouraging the Giro's manifestation were political, social and economic. They were about the political will of the left versus the interests of capital and the private banks.
That, in itself, is a fascinating story. Albeit, one that needs to be read with caution. Davies' book was completed just five years after the Giro was launched. It was still a political football at the time. So the arguments must be considered with that in mind. For example, when the Left emphasizes the technological efficiency of the scheme, are they really just seeking to distract from its true political intent and implications? Was the Giro a means to wrestle power from Capital, rather than a technological end. Similarly, the complaints against the Giro need to considered carefully. The vested interests of the Right could easily be buried under talk of the potential deflationary effect of the Giro on the 'money multiplier'.
If you're interested in the political shenanigans, but dubious about the Giro's role as a weapon of class warfare, have a listen to this talk (scroll down to bottom of page for podcast #01) given to the Postal Archive by the late Tony Benn in 2008(?). Tony Benn was postmaster general in the period leading up to the launch and the chief political architect of the Giro. He said it's one of the key achievements of his career.
A look inside the Giro HQ at Bootle (No Sound)
When the Giro was launched a penny was still a large bronze coin about an inch across that sat full-weight in the palm of your hand. We had shillings, and a money amount was declared in the form £/s/d as it had been, in practical terms, forever. But alongside money's solidity, there existed a countervailing trend. For the general population - rather than just bankers and the rich - it had only been fifty odd years since the arrival of the Bradbury note; the first widely used bank note. Across a generation or two - and two world wars - monetary-media were dematerializing. The Giro, in this sense, could be viewed as the next stage in this process.
Yet, really, it failed. It didn't become the dominant system it's architects had hoped and that trend of dematerialization (or the return to a non-material form of money if you're persuaded by David Graeber's account) did not play out. In the late 1960's, Britain wasn't ready to accept the Giro on masse.*
There are several possible narratives to explain this failure. The political narrative might talk about the bankers, their vested interests, and their clout with the political classes putting pay to a socialist project. Or a techno-economic narrative might mention the rise of credit cards and the competing efficiency gains in the private sector. There is also the socio-psychological narrative - one sure to irritate left-wing supporters of the Giro - that ultimately the Giro failed because it became most strongly associated with the unemployed. It was how benefits were paid. With credit card companies spending thousands on creating effective branding that linked 'ways of paying' to identity, having one's payment system linked squarely to society's disadvantaged neutralized any goodwill towards the Giro born of aspiration for modernity and the fetishizing of new technological solutions.
Card card companies meanwhile, were not shy of selling directly on sex.
But interesting as all this is to me, particularly with the importance I place on the relationship between sex and currency in our understanding of money, it was the philosophical rather then the erotic which brought the Giro back to my mind most recently.
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I've just completed my reading of the articles in the Dodd/Ingham Currency/Money debate, with a reading of Nigel Dodd's On Simmel’s Pure Concept of Money: A Response to Ingham. To attempt the dangerous task of summarizing the paper in a sentence; its about how money is not an empirical entity, but a regulative ideal built around an un-achievable perfection.**
What chimed with me in the paper, and set my mind back to thinking about the National Giro, was the following quote. It's from a review, written at the birth of the C20th, by G H Mead of Georg Simmel's The Philosophy of Money which Nigel quotes in support of the idea of a correspondence 'between the perfect society (as opposed to the perfect society) on the one hand, and a perfect money (as opposed to a perfect money), on the other.'***
Under ideal conditions... there would be no necessity that money should have any inherent value. It would be only an expression of the relation between the values of goods stated in the form of a fraction. Money would be purely symbolic... ...The failure to reach the ideal is the result of the instability of the community to make its equation between its different goods and the sum complete and perfect. In the presence of this uncertainty the individual reverts instinctively, especially in periods of panics, to an equation between the commodity and an intrinsically valuable thing. That money still has, to some degree, independent value is an indication of our failure to reach completely the ideal of economic organisation.
GH Mead Review of Philosophie des Geldes in D.Frisby Georg Simmel: Critical Assessments (1994) p. 144-6 quoted in Nigel Dodd On Simmel’s Pure Concept of Money: A Response to Ingham (2007)
This idea explored in the paper was then further reinforced in my mind at the lecture Nigel gave with Keith Hart at the LSE on Money Burning Day (that's 23rd October for the uninitiated). If you listen from around 34 mins to 36 mins Nigel talks about two trends; utopian and capitalistic. So on the one hand you have social and political reformers with schemes like LETS, timebank, or bitcoin trying to reform money for some Utopian ideal, and on the other you have payments companies like Paypal, Applepay or Square transforming money's infrastructure in their pursuit of profit.
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But what's striking to me is this odd mix between the utopian ideals of the Giro, and perfect money. In the postal archive talk from Tony Benn (above) it seems clear to me that he regards money as essentially the creation of a debt by the treasury. All money requires for its existence is a certain set of beliefs about money and political will. However, at the same time, the accounting certainty of the Giro and the fact that once entering into the system money would become more or less positive meant that as a system it would be non-fragile. In his talk Benn claims that the Giro would have weathered the financial storms of 2008 far better than the banks. So in this sense money is more akin to a commodity (albeit one imagined into existence by a sovereign authority rather than dug up from the ground) that flows intact around a system built originally as a means to an ethical end.
All this is contradictory. It's true that both left and right have, in the past. built a image of economy around commodity money. But to build a system to maintain money's value and enhance its speed of flow works to increase the monetisation of society. Is that a good thing or a bad thing? Certainly it seems more atuned to libertarian ideals than socialist ones. It seems more Maggie Thatcher than Tony Benn. And yet Tony nurtured it, and Maggie killed it. It's all a bit odd.
I suppose, taking a positive view, rather than contradictory and confused, one could equally say the Giro was pragmatic and conceptually-polygamous.
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After Nigel's lecture last week, I went into the LSE foyer to buy his book. It was £24.95. I pulled out £25 in cash and paid. The girl taking the money look perplexed. She had a hushed and hurried conversation with her colleague after which it became apparent that the five pence change wouldn't be forthcoming. Everyone else had their cards out to pay. The booksellers hadn't thought about people paying in cash. Back when I used to run my market stall the bane of my life was getting to the bank before 4pm on a Friday to get a tenners worth of pennies for change. My workers would hate having to tell the punters 'sorry, no change' and the punters would hate to hear it.
During the lecture a figure was quoted that nowadays only 3% of all transactions are in cash. This no doubt pleased the representatives of the payments industry present and who tend to see cash as a menace. That people who earn their living from forms of electronic payment want an end to cash should be of no surprise. But I want to stand up for cash. Not just because I'm a paranoid cash-dealing dodgy ex-bankrupt ex-market-trader van-driving money-burner. But because cash has been good to me. When the banks give you the cold shoulder because of your bankruptcy and you still have to feed, cloth and keep a roof over the heads of your family - then, cash is your friend.
The undercurrent that the future will be cashless is strong at any gig addressing the 'future-of-money'. Cash gets a bad rap. As if somehow the not being of cash, will in itself manifest the future. But as Nigel was at pains to point out, pluralism is the key to the future of money, not cashlessness. I'd go a little further. I'd say that cash is money's default setting. That the birth of cash from the Gygian tryst (as recounted by Herodotus) marks a critical moment in the manifestation of Money within mind. We can no more rub cash out, than we can escape being sex-mad monkeys. (Although that won't stop people trying)
Cash is a bulwark against a Utopian dream turning into a Dystopian nightmare.
When pursuing his vision of Utopia, Tony Benn had many struggles. His goal of establishing the Giro had to be realized with backing from the Treasury whom, it was stressed to him, really didn't want to upset the Banks. That was difficult enough. But the prospect of bringing in legislation may have forestalled the Giro for good. Benn found a way round this (he talks about it at 44min into the podcast). He presented an argument that went like this. If he said, as postmaster general, he'd instructed the post office's cable-laying ships to cease cable-laying and instead catch fish, would it be legal for the fish they caught to be sold through sub-post offices? The answer was 'Yes'. And so, on this strange legal whimsy, the Giro was born without the need for legislation.
Now imagine a different scenario. Imagine the answer was 'No'. Benn gets Wilson's backing to push through the legislation. The Giro becomes a project on which big reputations rest. Uptake is poor. The banks want it buried. The solution lies in getting rid of bank notes and pushing all transactions of £1 and above through the Giro. The legislation is passed. Cash is banned. The IMF bailout is avoided. The oil crises ridden out. Cash alternatives are outlawed. By 1984, it really is 1984.
There is very little that's perfect about cash. Technologically - certainly these days - its a poor primitive solution to transferring money. And yet it works. It balances freedom and equality in a way that electronic payments have not successfully replicated. So far, anyway. It should never be killed.
We'll be sad if there's nothing to burn.
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* Odd that huge changes were soon to be wrought upon the form and denomination of British currency that came with decimalization in 1971. There was resistance to this among the general public but no free choice about whether to accept it or not. I wonder if anyone was in favor of making the Giro an 'imposed' electronics payments solution.
*** I think the italicized emphasis actually works well to get across the meaning of these concepts but if you're unfamiliar with them this quote will help:
"Simmel contrasts the 'perfect society' with the 'perfect society'. The former contains what he calls a conceptual perfection, whereby each member of a society has a unique place within it. The latter consists of ethical perfection, wherein everyone is treated the same (Simmel, 2009: 51). To each form of perfection corresponds a form of equality : the perfect society favours individualism, the perfect society favours socialism."
Nigel Dodd Nietzsche's Money in Journal of Classical Sociology 13(1) p. 51 (2012)
Perfect money and perfect money can be understood along similar lines of conceptual versus ethical perfection. Chapter Eight of 'The Social Life of Money' (Nigel Dodd's new book) deals with these ideas at length.